Despite AI valuation pressures, US500 outlook remains positive.
Robust US data tempered Fed rate-cut bets, dragging equities lower for a third day, though investors expect the pullback to be short-lived. Nvidia’s (NVDA) 100 bln USD investment in OpenAI has raised questions over vendor financing risks, deepening worries over elevated valuations. Still, institutions expect US equities to hold a tactical bullish stance. JPMorgan (JPM) projected that while a government shutdown and fragile sentiment may trigger midweek weakness, solid economic growth, a resilient labor market, and AI momentum could drive the S&P; 500 to 7,000 by year-end.
US500 remains within the ascending channel, sustaining its steady uptrend. After briefly testing EMA21 and the channel’s lower bound, the index rebounded, indicating the potential extension of a bullish structure. If US500 continues to hold within the channel, the index may gain upward momentum toward the resistance at 6700. Conversely, if US500 breaks below the channel’s lower bound and EMA21, the index could retreat toward the support at 6530.
