S&P 500 (SPX) powers ahead on Powell pause

Equities soar as Powell pauses, perhaps as early as December.
NASDAQ is the main winner, closing 4.4% higher in a sea of green.
PCE data set to confirm the latest pause and power equities higher again.

Ivan Brian FXStreet

Equities surged post-Powell speech on Wednesday as he finally hinted at a pause in rate hikes. He began his remarks quite hawkishly, saying rates were going to end higher than the most recent forecasts and dot plots. It was the end of his speech, however, that investors focused on as it was highly dovish.

S&P 500 (SPX) news

"Time for moderating [the] hike pace may come as soon as December," Powell said. This line was the key component of the rally in stocks. Yields moved lower, and the NASDAQ shot higher. The US Dollar also fell, but that fall was not as pronounced and this morning's weak PMI and sales data from Europe that have tempered the Greenback's fall. Equities though have broken out. With Amazon (AMZN) saying it had a record Thanksgiving, recent news looks supportive.

S&P 500 (SPX) forecast

The latest options data shows call open interest at 4,100, which is the first target. Getting above there, and it is clearly on for a move to test August highs at 4,325. Then 4,031 remains the breakout point, and so it becomes the bullish pivot. Channel resistance sits at 4,100, which coupled with the call wall will act as a magnet.

SPX daily chart

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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.

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