US 500 Index – Struggling for Momentum Against Record HighsIt’s been a choppy week for the US 500 index so far, with prices jumping around in a 1.3% range between lows at 6901, seen at the start of the week, and highs of 6992, briefly seen after the release of a much stronger than expected US Non-farm Payrolls report yesterday afternoon.
While the jobs report provided good news for traders in one sense by adding support to the theory that the US economy remains resilient, which may boost corporate earnings in the near term, it also dented market expectations for a Federal Reserve interest rate cut in the first half of 2026 as well. This repricing, alongside the on-going shift out of software stocks that may be negatively impacted by the progress of AI, combined to help to cap the US 500 ahead of its recent record highs at 7015.
In terms of interest rates, the US central had already signaled at their January meeting that there were reasons to pause and evaluate incoming economic data readings before deciding on their next move, meaning yesterday’s jobs report will probably need to be assessed against Friday’s US CPI release (1330 GMT).
This latest inflation update could now take on even more significance for US 500 traders, who may currently be more sensitive to any reading that shows prices accelerating above expectations, an outcome that may keep the Fed from cutting interest rates for even longer than currently anticipated.
The technical outlook could also be important for the direction of the US 500 index moving into the weekend and the start of next week.
Technical Update: Is the Recovery Stalling Against the 7015 All-Time High?
Since the US 500 index posted its all‑time high at 7015 on January 28th, price action has turned choppy. The index fell more than 4% from that peak before staging a recovery, reaching 6992 on Wednesday following the delayed payrolls data release.
Despite the strength of the recent rebound, the US 500 index has so far been unable to break back above the 7015 all‑time high. Selling pressure has re‑emerged at this area, slowing the advance and signalling a possible loss of positive momentum. Some traders may view this as an early sign that the rally is stalling, raising the risk of fresh downside pressure and even a deeper corrective phase.
There is still no clear evidence of sustained strength or weakness, leaving directional bias uncertain. For now, the focus remains on monitoring key support and resistance levels to determine where the next meaningful move may emerge.
Assessing Potential Support Levels:
If, and it remains speculative at this stage, upside momentum continues to fade and fresh declines emerge, a meaningful support break on a closing basis would be needed to increase downside risks. The focus now turns to 6858, which represents a 50% retracement of the latest recovery and may act as a potential pivot level.
If a more extended decline were to unfold and prices close below the 6858 support level, downside pressure could be possible. The next support zone to monitor could then be 6716/30, which captures the December 18th and February 6th lows. A break beneath this area could raise the risk of further declines toward 6508, the November 21st low.
Assessing Potential Resistance Levels:
For now, the 6858 support level remains intact, as it has not been broken on a closing basis. This keeps open the possibility of renewed attempts at price strength. If upside pressure rebuilds, the initial focus might turn to the 6992 February 11th high, followed by the 7015 all-time extreme.
It may well be that only a closing break above this 6992/7015 resistance band could revive discussion of renewed positive momentum and open scope for a push to higher levels. As the chart above highlights, sustained closes above 7015 could shift focus toward 7082, which is the 38.2% Fibonacci extension, and potentially even 7180, the higher 61.8% level.
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