Sp 500 Remains Capped At Resistance Level

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Sp 500 Remains Capped At Resistance Level

S&P 500 Remains Capped At 4300 Resistance Level

In the last week, the S&P 500 index shed 0.74% of its value, making it the 4th consecutive week. The poor performance of the S&P 500 became even more bizarre given the positive PCE data, which showed a slowdown in the inflation growth.

During Monday's session, the volatility remained elevated in the S&P 500, but the day ended pretty much flat. The biggest news was from Tesla, which missed the third quarter's production and deliveries target. Similarly, the US workers from the automating sector are also on strike, which has already spread to multiple plants of General Motors.

So that's yet another reason behind the downbeat sentiment in the S&P 500 index as well as other US indices. In addition, the strength seen in the USD in the past few days is also a major reason for the bearish price action in the S&P 500 index.

US Bond Yields Wiegh Heavily On S&P 500

For this week, the performance of the S&P 500 will be highly dependent on the yield of US government bonds. In addition, we also have the ISM PMI (services) due in a few days, along with the NFP (Nonfarm Payrolls) after that! For all of these economic indicators, economists are expecting positive numbers.

As the US bond yields continue their upward trajectory, all the US indices, such as the NASDAQ Composite, S&P 500 & others, opened lower during Tuesday's session. This comes at a time when the yield for 3-month bonds is already above the 5.5% threshold.

Earlier, we also had the ISM report, which was better than expectations but still remains in contraction. Especially the contraction that continues in the manufacturing sector remains a major drag on the S&P 500 index.

However, some experts believe that expansion will soon enter into the US manufacturing sector. So when this change happens (in a few months), the bullish price-action will return to the S&P 500 once again. In addition, we also have the rumors that 2024 will be the year of rate cuts by the Fed, which will also support a bullish S&P 500.

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