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S&P Index edges lower as investors brace for Jackson Hole

  • The S&P 500 retreated below 4,400 after two consecutive days of gains.
  • Ahead of Powell’s speech on Friday, hawkish words from Thomas Barkin boosted tightening expectations on the Fed.
  • Eyes on S&P Global PMI data on Wednesday.

In Tuesday's session, the market sentiment remains mixed as investors await fresh catalysts to define their short-term trajectory.

On the downside, the US Treasury yield recovered during the mid-American session following Thomas Barkin's hawkish remarks, where he pointed out that if inflationary pressures don’t show evidence of giving in, more tightening would be necessary. In the meantime, the 2-year yield recovered back above 5% to its highest level since early July making the American stock market lose interest.

For the rest of the week, investors will closely watch US S&P Global Manufacturing and Service PMI figures from August, which will be released on Wednesday. It's worth noticing that a strong economy tends to favour the stock market. Still, due to the Federal Reserve (Fed) stance, evidence of a hot economy may make investors discount a more aggressively Fed, and in that case, it would apply pressure on the S&P.

According to the CME FedWatch tool, markets still expect a pause in September, followed by a 25 basis point (bps) hike in the November meeting. However, those odds may change following Jerome Powell’s speech on Friday at the Jackson Hole Symposium, where investors will look for clues regarding forward guidance.

SPX Levels to watch

According to the daily chart, the technical outlook for SPX remains bearish for the short term. The Relative Strength Index (RSI) remains deep in negative territory while the Moving Average Convergence Divergence (MACD) prints higher red bars. Additionally, the index is below its 20-day Simple Moving Averages (SMA) but above the 100 and 200-day averages, suggesting that on the bigger picture, the bulls still have the upperhand over the bears.

Supports: 4,370, 4,350, 4,300 (100-day SMA).
Resistances: 4,400, 4,420, 4,450.

SPX Daily Chart

SP 500

Overview
Today last price4382.08
Today Daily Change-15.95
Today Daily Change %-0.36
Today daily open4398.03
 
Trends
Daily SMA204489.27
Daily SMA504458.13
Daily SMA1004307.88
Daily SMA2004143.2
 
Levels
Previous Daily High4405.62
Previous Daily Low4358.81
Previous Weekly High4498.48
Previous Weekly Low4337.34
Previous Monthly High4607.11
Previous Monthly Low4375.8
Daily Fibonacci 38.2%4387.74
Daily Fibonacci 61.8%4376.69
Daily Pivot Point S14369.35
Daily Pivot Point S24340.68
Daily Pivot Point S34322.54
Daily Pivot Point R14416.16
Daily Pivot Point R24434.3
Daily Pivot Point R34462.97

Author

Patricio Martín

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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