US500 Outlook Post US PCE Data

Fundamental Analysis
US500 experienced a pullback from record highs after the release of the PCE inflation data as traders absorbed persistent inflation pressures and reassessed the timing of US Fed rate cuts. The sentiment has shifted to cautious optimism with a moderate risk-off tone as traders took profits after a strong August rally and rotated out of high growth tech stocks. The PCE data matched market forecasts, maintaining expectations for a Sep Fed rate cut but offering no new bullish momentum for equities. Traders are now watching upcoming labor data and CPI releases for added confirmation before recommitting to aggressive upside positions.

Technical Analysis
The US500 is in correction after reaching new highs, with the market positioned for possible sideways action until significant new economic headlines emerge. Traders are awaiting fresh macro catalysts and digesting possible elevated rates and inflation. Odds for a September cut remain high but sticky inflation means the Fed may stay cautious. Next week’s jobs and wage data are key for market direction. Weakness in technology stocks could continue to drag on the index if earnings and regulatory headwinds persist..

Key Technical Levels
Support 6,428 Protects against near-term declines
Resistance 6,545 Bulls need to reclaim for new record highs
Downside Target 6,380

Analysis by Terence Hove, Senior Financial Markets Strategist at Exness