The S&P 500 closes with gains and reaches two-week highs

  • The S&P 500 stock index begins the week with a daily gain of 0.35%.
  • Super Micro Computer (SMCI) shares soar 15.87%, hitting near one-month highs.
  • Enphase Energy (ENPH) shares are up 8.48% today, hitting a two-and-a-half-week high.
  • Investors’ attention will be on the home price index and the FOMC Minutes tomorrow.

The S&P 500 hit a daily low of 5,963, drawing aggressive buyers who pushed the index to a high not seen since Nov. 25 at 6,018. Currently, the S&P 500 is trading above 5,986, gaining 0.35% at the market close.

Super Micro Computer and Enphase Energy keep the S&P 500 in positive territory

Super Micro Computer (SMCI) shares are up 15.87% today, tying a streak of three consecutive sessions with double-digit gains, trading at the time of writing above $38.41. SMCI has recovered from the November 14 low of $17.36, reflecting investor confidence in the company after hiring a new accounting auditor. In the same vein are the values ​​of Enphase Energy (ENPH), which rose 8.48% daily, reaching a maximum not seen since November 7 at $72.56, signing its fourth consecutive session on the rise.

The United States economic agenda considers the publication of the housing price index tomorrow. The consensus projects an increase of 0.3% during September, in line with the growth achieved in October. Later, the Fed Minutes will be released, where the monetary authority is expected to offer clarity on the pace of interest rate reduction in the short term.

Levels to consider in the S&P 500

The S&P 500 formed short-term support at 5,830, given by the 19 low near the 50% Fibonacci retracement level. The next key support area is at 5,694, the November 4 pivot point. The important resistance zone is at 6,026, the all-time high reached on November 11.

S&P 500 4-hour chart

The S&P 500 FAQs

The S&P 500 is a widely followed stock index that measures the performance of 500 public companies and is considered a broad measure of the US stock market. The influence of each company in the calculation of the index is weighted based on market capitalization. This is calculated by multiplying the number of listed shares of the company by the share price. The S&P 500 Index has achieved impressive returns: $1.00 invested in 1970 would have produced a return of almost $192.00 in 2022. The average annual return since its inception in 1957 has been 11.9%.

Companies are selected by committee, unlike other indices where they are included based on established standards. Still, they must meet certain eligibility criteria, the most important of which is market capitalization, which must be equal to or greater than $12.7 billion. Other criteria are liquidity, domicile, market capitalization, sector, financial viability, listing time, and representation of the sectors of the United States economy. The nine largest companies in the index represent 27.8% of the index’s market capitalization.

There are several ways to trade the S&P 500. Most retail brokers and spread betting platforms allow traders to use Contracts for Difference (CFDs) to place bets on price direction. In addition, you can buy index funds, mutual funds and exchange-traded funds (ETFs) that track the price of the S&P 500. The most liquid of the ETFs is the London Stock Exchange ETF. The most liquid of the ETFs is State Street Corporation’s SPY. The Chicago Mercantile Exchange (CME) offers futures contracts on the index and the Chicago Board of Options (CMOE) offers options, as well as ETFs, inverse ETFs, and leveraged ETFs.

There are many factors that drive the S&P 500, but primarily it is the aggregate performance of its component companies, revealed in their quarterly and annual earnings reports. US and global macroeconomic data also contribute, influencing investor sentiment, which if positive, drives earnings. The level of interest rates, set by the Federal Reserve (Fed), also influences the S&P 500, as it affects the cost of credit, on which many companies largely depend. Therefore, inflation can be a determining factor, as well as other parameters that influence the Federal Reserve’s decisions.

Source: Fx Street

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