US 500

While the market appears bullish right now, the S&P 500 forecast is far from certain, especially with a lack of fresh bullish catalysts to consider. Could profit-taking negatively impact the market soon?

So far, US stock investors appear unfazed by global softness in commodities and bond markets, even as the 10-year Treasury yield inches closer to 4.5%, reflecting a more hawkish interest rate outlook for next year. But with the dust settling on Trump’s election victory, could we finally see retracement to cause a bearish shift in the short-term S&P 500 forecast?

A brutal day for risk sent Wall Street indices lower on Thursday, but support levels and the tendency for stocks to rise on the week of a US election could help the S&P 500 and ASX 200. Assuming the wheels don't truly fall off first.

US equities have fallen at the start of today’s US session, following on the losses from the previous day and weaker global markets. The tech sector is in the spotlight following underwhelming earnings reports from Meta and Microsoft, with the latter falling in excess of 5% shortly after the open.

The USD resumed its place at the top of the FX table ahead of a key US inflation report, which has USD/JPY bulls on the cusp of reclaiming the 150 handle. The S&P 500 reached a record high and the Dow Jones is within striking distance of following suit.

Our S&P 500 analysis suggests a correction is long overdue, but we need to see a reversal pattern first before we try to call any sort of a make top. But heading to Q4, there are plenty of risks to consider, including the market being too optimistic with the Fed’s rate cuts and on company earnings results.

It has been another risk-on day in the markets so far in this first half of Thursday’s session, especially for China where stocks have stormed higher amid all the stimulus efforts by the government. As we approach the end of September, the major US indices are now near overbought levels ahead of Q3 earnings and the US elections.

The US stock market has shown impressive resilience following the recent volatility. Investors, thrilled by the Federal Reserve’s outsized rate cut, have pushed index futures higher. However, there are mixed opinions about what lies ahead. For now, it looks the S&P 500 will open at a fresh record high.

The Fed may spark disappointment if it doesn’t signal rate cuts of the same magnitude as currently priced by markets. However, less cuts could actually deliver more upside for US stock futures given the economic implications, meaning any kneejerk selling could provide decent entry levels for traders.

While there’s been some continuation to the upside following Wednesday's tech-driven rally, any hint of fading momentum could put the bulls back on shaky ground. After all, clear bullish catalysts seem few and far between at the moment. The S&P 500 forecast could yet turn bearish, if we now see another twist in price action.

With so much attention on US employment data this week, I feel compelled to remind all that today’s ISM services report could pack a punch of its own.