The S&P 500 closed higher on Wednesday as economic data indicated a slowdown in the US economy, leading to expectations that the Federal Reserve will pause rate hikes in September. Private payrolls growth was slower than expected, suggesting a softening labor market. The US economy also expanded at a slower pace in the second quarter as the GDP growth rate data showed a 0.1% increase. The prospect of a "softer landing" for the economy boosted demand for growth stocks, Nvidia reached its highest ever closing price, while Mastercard and Visa gained on reports of raising credit card fees while HP Inc tumbled after trimming its annual forecast due to slowing demand.
‘Traders' bets on the Fed leaving interest rates unchanged in September increased reaching more than 88% according to the Fedwatch tool and the US 30 year treasury yields slipped to a three-week low of around 4.2%. The S&P 500 and Nasdaq rose, while investors are now awaiting inflation and non-farm payroll data for further clues on interest rates.’ said Antreas Themistokleous, market analyst in Exness.
On the technical point of view the price is currently on the move to resume the overall bullish momentum and the moving averages also confirm the overall bullish trend since the faster one (50 days) is trading above the slower one (100 day) at the time of writing. In addition the weekly upward trendline is still holding strong without any valid retests in the last 5 months so the long term outlook of the index seems bullish.
On the other hand the Stochastic oscillator is in the extreme overbought levels indicating that a correction in the near short term might be possible while the price is closing in at a very strong technical resistance area of the 78.6% of the daily Fibonacci retracement level as well as the upper band of the Bollinger bands around the 4,540 area.