S&P500 (SPX) Price Analysis – Nov 01, 2024
Daily Price Outlook
The global market sentiment has turned bearish, as evidenced by the S&P 500's sharp decline to 5,702.45, down 1.86%. This marks its largest one-day drop since September 3. In addition to this, Nasdaq Composite also faced losses, falling 2.76% to close at 18,095.15.
However, this downturn can be attributed to disappointing earnings reports from major tech companies like Microsoft and Meta Platforms. Apart from this, the ongoing uncertainty surrounding the upcoming U.S. Presidential election has further impacted market confidence and contributed to the losses.
Geopolitical Uncertainty and Market Volatility Impacting S&P 500 Performance
On the geopolitical front, Investors are increasingly concerned about rising tensions, especially with Israel on high alert for a possible Iranian response following its recent attacks.
Meanwhile, U.S. officials are visiting the Middle East to stop Iran from retaliating and to address problems in Lebanon and Gaza, but there is doubt about whether these efforts will ease tensions before the election. These geopolitical tensions are weighing heavily on market sentiment, leading to increased volatility and declines in major indexes like the S&P 500.
Economic Uncertainty and Mixed Data Weigh on S&P 500 Performance
The S&P 500 has shown bearish performance, influenced also by the recent release of Personal Consumption Expenditures (PCE) data on Thursday. Meanwhile, the market remains cautious ahead of the upcoming U.S. presidential election, which is adding to the uncertainty.
Traders are now waiting for the Nonfarm Payrolls (NFP) report set to be released on Friday, with expectations that the U.S. economy added 113,000 jobs in October and the unemployment rate will hold steady at 4.1%.
On the data front, the PCE Price Index indicated a year-over-year rise in core inflation of 2.7% in September, which may keep investors on edge. Furthermore, Initial Jobless Claims dropped to a five-month low of 216,000, signaling a resilient labor market.
However, this mixed data does little to boost market confidence, especially with the U.S. GDP growing at an annualized rate of 2.8% in Q3, falling short of the 3.0% growth anticipated.
Meanwhile, the ADP Employment Change report showed a robust addition of 233,000 jobs in October, the decline in JOLTS Job Openings to 7.443 million in September, below expectations, adds to the negative sentiment impacting the S&P 500.
As a result, the S&P 500 index is feeling the heat from economic uncertainty, mixed signals in the labor market, and ongoing inflation worries. This has left investors feeling cautious as they look ahead to important economic reports and the upcoming presidential election.
S&P 500 – Technical Analysis
The S&P 500 (SPX) has seen a notable decline, currently trading around 5,705.44, down 1.86% as bearish momentum persists. The index faces strong resistance near 5,765.05, a key pivot point aligning with recent highs.
Should the S&P 500 manage to break above this level, it could target the next resistance at 5,798.37, with an upper threshold near 5,825.90. However, with the 50-day EMA positioned at 5,809.62 and downward pressure evident, the index may struggle to regain bullish traction in the near term.
On the support side, immediate support rests at 5,696.93, with further support levels at 5,675.11 and 5,649.97. The RSI has dipped to a low 21, signaling oversold conditions that could potentially attract short-term buying interest. Yet, the overall technical setup remains weak, as the index struggles below the 50-day EMA, reflecting a bearish bias.
For traders looking to capitalize on this trend, an entry below 5,730 could provide a viable short position, with profit-taking opportunities around 5,675, and a stop loss set at 5,764 to manage risk. As market sentiment remains fragile, further downside appears likely unless key resistance levels are breached.
Given these conditions, the S&P 500’s outlook remains tilted to the downside, with a strong test of support likely in the days ahead.
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