S&P Rally Stalls On Ceasefire Uncertainty & Inflation Fears
Stock Rally Pauses
The rally in US stocks has paused for now as traders grapple with uncertainty around the US/Iran ceasefire and brace for the latest US inflation readings due later today. Stocks cheered news of the ceasefire earlier this week with the S&P gapping higher by nearly 3% on Wednesday. Pre-market prices today are a little softer as traders fear that the ceasefire is at risk of collapsing. Iran has yet to reopen the Strait of Hormuz and continued attacks against Kuwait overnight while cautioning Israel for its attacks on Lebanon. Given the precarious nature of the truce, prices remain highly sensitive to incoming headlines, as likely to push higher on positive news as they are to fall on any worrying reports.
US Inflation on Watch
Looking ahead today, focus will also be on the latest US inflation data. CPI is expected to have jumped significantly higher last month to 3.4% from 2.4% prior. If confirmed, this will put Fed tightening firmly on the table and should act as a headwind to stock prices near-term. This dynamic will be exacerbated if we hear any negative news on the back of US/Iranian negotiations this weekend. On the other hand, if inflation rises less than expected, stocks could show some relief. If talks this weekend then progress well, next week could start with a risk-positive tone.
Technical Views
SPX
The rally has seen price pushing back up to challenge the bear trend line from YTD highs and the 6,786-level resistance. This is a key pivot of the market which if broken, will put the all-time highs around d7004 back in focus. If we turn lower here, next key support comes in at 6,550.95.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.