S&P 500 trims most of intraday losses, but 4,400 continues to provide ceiling

• US stocks were mixed on Thursday.
• The S&P 500 recovered most of a nearly 1.0% intraday drop but remains capped below 4,400.

US stock market trading it has been defined more by the rotation of multiple high-tech names and growth to more defensive stocks and value names on Thursday rather than any broad risk trend. Given that not much has changed on the Ukraine-Russia war front (i.e. no signs of de-escalation) and Fed Chairman Jerome Powell’s speech, in line with his comments the day before, an S&P 500 almost lateralized shouldn’t be too surprising. The index fell as low as 4,340, where it was around 1.0% lower on the day at the time, but has since recovered to the 4,375 zone, where it trades with modest losses of around 0.3%. The 4,400 level continues to offer strong resistance.

The Nasdaq 100 was down 1.2% for the last time and pulled back just above 14,000 having hit 14,300 earlier in the day, with the index apparently under selling pressure as it tested its 21-day moving average. Meanwhile, the Dow Jones was last sideways and traded just below 33,900, near the middle of its intraday range of 33,650-34,180. The CBOE S&P 500 Volatility Index fell just under a point to slightly below 30.00 again, still well above its long-term average, which is close to 20.00.

Investors are facing a wall of concern on multiple fronts. Commodity prices were all over the place on Thursday, with WTI hovering as high as $116.00 (multi-year highs) before falling below $110 amid continued feverish speculation over the impact of Russia sanctions. . The view of Fed policymakers, including Powell, who spoke Thursday in the second of his two-day semi-annual testimony to Congress, is that events are likely to make the inflation problem worse. And that could mean a faster pace of rate hikes (ie 50 basis point intervals) later this year if inflation doesn’t ease as expected.

Additional technical levels