During the European trading session, the S&P 500 index had a mixed performance as trading began this Monday. Initially, stock futures rose, driven by last week’s data, which raised hopes that the Federal Reserve might soon cut interest rates. This led to early gains for the index.

However, as the day progressed, the S&P 500 dropped to an intraday low of 5,451. The initial optimism was tempered by uncertainties about the timing of the Fed’s potential rate cuts and other macroeconomic factors affecting market sentiment.

US Economic Data and Fed Policy Expectations Affect S&P 500 Performance

The S&P 500’s mixed performance can be attributed to recent US economic data and monetary policy expectations. On Friday, data showed a drop in the annual rate of inflation of the core Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred measure of inflation. This deceleration has led to speculation that the Fed might cut interest rates by September.

However, Federal Reserve officials have remained cautious, emphasizing the need for more evidence of sustained inflation reduction before committing to rate cuts. This cautious stance creates uncertainty in the market, impacting the S&P 500’s performance.

Key points affecting market sentiment include:

• The upcoming release of US labour market and PMI data for June, which will provide further clues about the economy’s health and potential monetary policy direction.
• ISM Manufacturing PMI data is expected to show a slight improvement but remain below the 50.0 threshold, indicating a contraction in factory activities.

Overall, the economic outlook and monetary policy expectations are significantly shaping the S&P 500’s performance.

Israel-Gaza Conflict and Its Impact on the S&P 500 Index

On the geopolitical front, tensions have escalated dramatically between Israel and Gaza. Recent reports from Al Jazeera highlight severe human rights concerns, including allegations of torture against Palestinian detainees in Israeli prisons, as reported by Dr. Muhammad Abu Salmiya of al-Shifa Hospital.

Israeli military actions, such as tank advances in Gaza’s Shujayea district and the use of Palestinian prisoners as human shields, have intensified the conflict, trapping civilians and escalating casualties. The toll is devastating, with over 37,900 killed and 80,060 wounded in Gaza since October 7.

Key impacts on the S&P 500 include:

• Increased geopolitical instability, which typically affects investor sentiment and market performance.
• Potential disruptions in global markets due to escalating conflict and its broader implications on international relations and economic stability.

Overall, the ongoing conflict in Gaza poses significant risks to market stability and investor confidence, impacting the performance of the S&P 500 index.

S&P500 Price Forecast

The S&P 500 is currently priced at $5,460.49, reflecting a 0.41% decline. In the 4-hour chart timeframe, several key price levels are critical for traders to monitor. The pivot point, marked at $5,447, serves as a central indicator for potential price movements.

Immediate resistance is identified at $5,486, followed by additional resistance levels at $5,524 and $5,557. On the support side, the index finds immediate support at $5,412, with subsequent support levels at $5,377 and $5,337. These levels are crucial in determining the index’s short-term direction.

Technical indicators show the Relative Strength Index (RSI) at 47, suggesting a neutral market sentiment. The 50-day Exponential Moving Average (EMA) is currently positioned at $5,445, acting as near-term support for the index.

In conclusion, the S&P 500 maintains a bullish outlook above the pivot point of $5,447. A break below this level could trigger a sharp selling trend. Immediate resistance at $5,486 will be pivotal for further upward movement.