S&P500 (SPX) Price Analysis – June 01, 2023

Daily Price Outlook

The global market sentiment prolonged its upward rally on Thursday, maintaining a positive outlook as US policymakers made progress to avoid a potential default. Furthermore, the upbeat Chinese and US data further supported the market sentiment.

However, it is crucial to note that there is still concern among market participants due to upcoming important US employment and activity data and the Senate voting on the bill to extend the US debt ceiling. These factors have been causing cautiousness among optimistic investors in the market.

The S&P 500 Futures saw its first daily gains in four days and approached the 4,200 level. It rose by 0.05% to around 4,194. At the same time, the yields on the US 10-year and two-year Treasury bonds stabilized around 3.65% and 4.42%, respectively, after reaching their lowest points for the week in the previous decline.

Positive Market Sentiment as US House of Representatives Supports Measures to Avoid Government Default

Market sentiment has improved as the Republican-controlled House of Representatives in the US has shown support for measures to prevent a government default. Reuters said the House of Representatives voted 314-117 to pass the legislation. However, the bill will now proceed to the Senate, where it needs to be approved and sent to President Joe Biden before the Monday deadline.

Federal Reserve Likely to Keep Interest Rates Steady in June, Mixed US Data Shows

According to Wall Street Journal’s Nick Timiraos, multiple Federal Reserve speakers and recently released mixed US data indicate that the Federal Open Market Committee (FOMC) will likely maintain interest rates at their current levels in June. This will impact the market as investors may see this as a sign that the central bank will continue its supportive monetary policy, which can help boost stock markets and risky assets.

Regarding data, US JOLTS Job Openings for April exceeded expectations at 10.103 million, compared to the forecasted 9.375 million and the previous figure of 9.745 million. However, the May Chicago Purchasing Managers’ Index declined to 40.4 from the previous reading of 48.6, falling short of market forecasts at 47.0. While the US consumer sentiment gauge improved earlier in the week, the details were not impressive.

SPX Price Chart – Source: Tradingview

SPX S&P500 – Technical Outlook

The S&P 500 index is currently experiencing a mild bearish sentiment near the 4,180 level, unable to surpass the resistance at 4,215. In the four-hour timeframe, the SPX has formed a solitary doji candlestick pattern, suggesting a waning bullish trend and a growing impact from sellers.

Looking upwards, there is potential support around the 4,150 level, which is further validated by a trend line observed on the four-hour timeframe. Today’s approach involves closely monitoring the 4,150 level and considering selling positions if the price nears this level.