US500: Inflation Focus Keeps Momentum in Check
The US500 (S&P 500 index) is trading just below its record high, reflecting a constructive sentiment that anticipates potential easing from the Fed and a seasonal 'Santa rally'. Investors, however, are showing caution ahead of key US inflation data.
Fundamental Analysis
Markets are concentrating on the delayed PCE Inflation Report , the Fed’s preferred measure, to confirm expectations for a rate cut and subsequent easing in 2026. Futures pricing shows a high probability of a 0.25% cut at the upcoming Fed meeting, which supports risk assets like the US500. Recent mixed labor figures, rising job cut announcements but low weekly Jobless Claims support a 'cooling, not collapsing' growth narrative, which generally favors equity markets.
Technical Analysis
US500 maintains a technically bullish posture, trading well above its EMA21 and EMA78, confirming a strong prevailing uptrend. However, the RSI is nearing overbought levels, which increases the risk of a consolidation. Immediate resistance sits at 6,920, close to the recent peak. Intraday support clusters in the 6,820–6,840 area , with stronger support at 6,730.
Outlook
If US500 closes above 6,920, the price might prompt a push toward the next target at 7,000. Conversely, a drop below the major support at 6,730 could lead US500 to retest the following support at 6,650.
Analysis by Terence Hove, Senior Financial Markets Strategist at Exness.
