SPX: in a correction mood?

SP:SPX   S&P 500 Index
Market never liked uncertainties, which was evident on the US equity markets for one more time. The optimism from the beginning of this year is still not fading, however, it reacts to increased inflation data in the US and also geopolitical tensions, which for one more time are emerging in the Middle East. The future period might bring some challenges to the market optimism, regardless of the fact that the US economy is in a relatively good shape, despite restrictive monetary policy. Aside, it should be also considered that China`s authorities brought a decision not to use foreign made chips in local computers. As Wall Street Journal reported, companies which would be most impacted by this decision are AMD and Intel, whose stock prices fell around 5% during the previous week.

The S&5 500 closed Friday`s trading session 1.46% lower. This was the second worst trading day since the beginning of this year. The index closed at level of 5.123. Some impact on this move had a relatively disappointing release of Q1 results within the banking industry. JPMorgan shares dropped by more than 6%, Wells Fargo was down by 0.4% while Citigroup slipped by 1.7%.
Charts are showing that the S&P 500 is still not in the oversold momentum, however, it is moving toward this territory. In this sense, and taking into account geopolitical and economic risks, there is some probability that correction might continue during the course of the week ahead.


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