The US500 moved lower after a volatile session marked by fading momentum in technology stocks and renewed macroeconomic uncertainty. Despite short-term weakness, the index remains up almost 10% year-on-year compared to this period in 2024.
Fundamental analysis
The US Federal Reserve policy is now in sharp focus, with remarks from policymakers supporting expectations for a possible interest rate cut in Dec, which is inspiring a slight rebound and giving traders hope for year-end support. Fed New York President Williams said the central bank has room to cut rates again soon as the labor market softens, which improved sentiment. Recent strong US earnings, including from key US 500 members, have offered some relief but have not reversed the current downward trend as AI-driven enthusiasm cools. Renewed fiscal uncertainties, increasing debt issuance, and mixed economic data have weighed on sentiment.
Technical analysis
The index charted a bearish engulfing candlestick below its EMA21, suggesting sellers still control price action in the short term. Key resistance is observed near 6775 and 6830, while immediate support is now at 6520 and a major support at 6445. The volatility index (VIX) jumped by nearly 12% to 26.42, signaling rising market stress and a defensive posture by portfolio managers. In a technical warning that sellers have seized control, charts show Thursday’s losses fully erased the previous session’s advance. The Bearish Engulfing pattern was unusually large and swift and echoed a similar setup in early Mar that preceded a 5% drop in the index. The US500 broke below both its EMA21 and EMA78, levels that many traders view as key lines of support.
Sentiment and outlook
A $5 tln slide in global equities has left investors questioning how much further the tech-led pullback can go. US stock futures swung between gains and losses in volatile trading amid a sustained retreat from the market’s riskier corners. However, seasonality is historically positive heading into Thanksgiving week, and many market participants expect a rebound into year-end, especially with the Fed likely leaning dovish and volatility peaking. Risk appetite remains subdued, but technical and macro catalysts point toward possible stabilization and recovery if central bank signals remain supportive.
Analysis is by Terence Hove, Senior Financial Markets Strategist at Exness
Fundamental analysis
The US Federal Reserve policy is now in sharp focus, with remarks from policymakers supporting expectations for a possible interest rate cut in Dec, which is inspiring a slight rebound and giving traders hope for year-end support. Fed New York President Williams said the central bank has room to cut rates again soon as the labor market softens, which improved sentiment. Recent strong US earnings, including from key US 500 members, have offered some relief but have not reversed the current downward trend as AI-driven enthusiasm cools. Renewed fiscal uncertainties, increasing debt issuance, and mixed economic data have weighed on sentiment.
Technical analysis
The index charted a bearish engulfing candlestick below its EMA21, suggesting sellers still control price action in the short term. Key resistance is observed near 6775 and 6830, while immediate support is now at 6520 and a major support at 6445. The volatility index (VIX) jumped by nearly 12% to 26.42, signaling rising market stress and a defensive posture by portfolio managers. In a technical warning that sellers have seized control, charts show Thursday’s losses fully erased the previous session’s advance. The Bearish Engulfing pattern was unusually large and swift and echoed a similar setup in early Mar that preceded a 5% drop in the index. The US500 broke below both its EMA21 and EMA78, levels that many traders view as key lines of support.
Sentiment and outlook
A $5 tln slide in global equities has left investors questioning how much further the tech-led pullback can go. US stock futures swung between gains and losses in volatile trading amid a sustained retreat from the market’s riskier corners. However, seasonality is historically positive heading into Thanksgiving week, and many market participants expect a rebound into year-end, especially with the Fed likely leaning dovish and volatility peaking. Risk appetite remains subdued, but technical and macro catalysts point toward possible stabilization and recovery if central bank signals remain supportive.
Analysis is by Terence Hove, Senior Financial Markets Strategist at Exness
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.