S&P 500 (SPX) falls as hawks circle Santa's rally sleigh

Stocks fall as central banks turn hawkish and risk assets move lower.
Nasdaq falls over 3%, while S&P and Dow fall over 2%.
ECB adds to risk assets woes with an uber-hawk move.

Ivan Brian FXStreet

The S&P 500 struggled along with other indices on Thursday as the penny dropped that central banks are not going to reduce their rate hikes. The ECB was notably hawkish, and rumours circulated that members wanted a 75bps hike but Lagarde had to offer a series of 50bps hikes to get an agreement. Stocks naturally fell sharply while yields rose.

S&P 500 (SPX) stock news

European markets are already weaker, but there is some positive news again on the earnings front with US Steel a notable barometer. They said commercial demand is improving. Darden Restaurants also showed the consumer continues to hold up well. With yields rising again as investors digest four central banks hiking 50bps each in the past 24 hours, stocks will struggle. Santa rally? Hmm, let's first see if he is real!

S&P 500 (SPX) forecast

Today sees one of the biggest quadruple witchings in the past 10 years with a huge expiry. That will cause massive volumes and volatility and is likely the year's last major event. The recent range has been 4,100 to 3,900, and we have options strikes at those levels. Direction is very hard to call into such an expiry, but IB assessments are mildly bullish. A break of 3,859 is likely to test 3,745. No strong resistance until 4,100, but sentiment again looks bearish.

SPX daily chart

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

AUD/USD edges higher above 0.7050 as hot CPI lifts RBA rate hike odds

The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar edges higher against the US Dollar as hotter inflation data bolsters expectations of Reserve Bank of Australia rate hikes. The US September Personal Consumption Expenditures inflation report will be in the spotlight later on Thursday.

USD/JPY retakes 158.00 as USD stalls the post-FOMC corrective slide

USD/JPY attracts some dip-buyers during the Asian session on Thursday, climbing back above 158.00 as the US Dollar reverses part of the post-FOMC pullback from a two-week high. Bulls, however, await key US macro data – the Advance Q3 GDP and the PCE Price Index – before positioning for further gains. Focus will then shift to the crucial BoJ policy update on Friday amid firming expectations for a December rate hike.

Gold weakens further below $4,050 amid Fed rate hike bets and Iran risks

Gold sticks to intraday losses below the $4,050 level heading into the European session ,and for now seems to have snapped a three-day winning streak to the weekly top set the previous day. The US Dollar attracts fresh buyers after Wednesday's post-FOMC corrective slide from a two-week high and is seen as a key factor weighing on the precious metal.

US GDP expected to grow at 3.2% in Q3

The United States Bureau of Economic Analysis is set to publish its preliminary estimate of the Gross Domestic Product for the July-September period on Thursday, with analysts expecting the data to show annualised growth at a solid 3.2%, a decent improvement from the 2.2% expansion recorded in the previous quarter. Markets brace for US growth and PCE data amid geopolitical jitters

European Central Bank is expected to hold interest rates despite high inflation pressures

The European Central Bank concludes its two-day monetary policy meeting on Thursday and will announce its decision at 13:15 GMT. The bank is widely expected to leave the interest rate on the Main Refinancing Operations and the Deposit Facility unchanged at 2.65% and 2.50%, respectively, after having raised both of them by 25 basis points in September.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.