S&P 500 Poised for Record Highs as Risk Sentiment Rises
The S&P 500 has shown resilience recently. After a dip, the index not only recovered but also achieved new weekly highs. A significant shift in sentiment occurred after former President Trump announced a framework for a deal concerning Greenland. He further indicated that there would be no new tariffs, easing investor concerns.
S&P 500 Outlook: Numerical Milestones Ahead
With reduced geopolitical risks, analysts believe there is a favorable path toward all-time highs for the S&P 500. The focus will soon shift back to economic indicators and the Federal Reserve’s decisions. While hawkish adjustments could momentarily impact the market, these could also present buying opportunities if inflation remains stable.
Federal Reserve and Interest Rates
Investors are keenly awaiting the FOMC decision. Expectations suggest the central bank will maintain the current interest rates, looking for more data before enacting future cuts. A notable development could occur if Trump announces his choice for the Fed chair, with potential candidates including:
- Rieder
- Warsh
- Waller
Current market sentiment favors Rieder and Waller, given their perceived ability to secure consensus among Fed members and maintain the independence of the institution.
S&P 500 Technical Analysis Overview
Daily Timeframe Analysis
On the daily chart, the S&P 500 has erased earlier losses related to geopolitical tensions. The index is nearing a potential all-time high as bearish risks lessen.
Four-Hour Timeframe Trends
The four-hour chart reveals that the S&P 500 has broken through a downward trendline, extending gains toward new highs. An upward trendline now indicates bullish momentum. From a risk management perspective, buyers may find a favorable setup near this trendline to capitalize on further gains.
Hourly Timeframe Insights
A minor support zone has formed around the 6,970 level on the hourly chart. Buyers are likely to return to this level, with defined risks below the support. Conversely, sellers will aim for a price break that could lead to declines toward the 6,771 level.
Upcoming Economic Catalysts
A busy week lies ahead for economic indicators that could affect market sentiment. Key upcoming data releases include:
- Weekly US ADP jobs data
- US Consumer Confidence report
- FOMC policy announcement
- US Jobless Claims figures
- US PPI report
Each of these reports will provide insights that could influence S&P 500 movement and overall market sentiment.
