S&P 500 Climbs to 5,965 Amid Jobless Claims Drop and Fed Rate Cut Speculation

The S&P500 Index has climbed to impressive levels, hovering near 5,963, buoyed by investor optimism despite mixed economic signals.

The market’s upward trajectory reflects resilience amid inflation concerns and reduced rate cut expectations. Positive economic indicators, including robust jobless claims data and optimism over the potential policy direction of the incoming administration, have kept the index on a strong footing.

The latest Initial Jobless Claims fell to 213,000 for the week ending November 15, better than expected and marking a decline from the previous week’s revised figures. This improvement underscores the labor market’s strength and bolsters confidence in corporate earnings growth.

Meanwhile, futures traders are now pricing in a 57.8% probability of a 0.25% rate cut by the Federal Reserve in December, a drop from last week’s 72.2%, reflecting a cautious approach by Fed officials.

However, the market is also digesting mixed data from the US S&P Global PMI, which showed a contraction in private-sector activity. The PMI Composite Output Index fell to 49.4 in November from 50.2 in October, the second contraction in three months.

This highlights economic uncertainties but hasn’t derailed investor sentiment in the S&P 500.

S&P500 Price Forecast: Technical Analysis

The S&P 500 is currently trading within a consolidation phase, maintaining its position above key technical levels. The 23.6% Fibonacci retracement at 5,935 acts as a pivotal level, while immediate resistance is at 5,979, with additional targets at 6,009 and 6,046. On the downside, support levels are positioned at 5,915, 5,890, and 5,851.

The Relative Strength Index (RSI) is at 57.20, signaling moderate bullish momentum without reaching overbought territory. Additionally, the 50-day Exponential Moving Average (EMA) at 5,912 continues to provide strong dynamic support, aligning with the broader bullish trend.

A sustained break above 5,979 could pave the way for the index to challenge the psychological 6,000 mark, while a failure to hold above 5,935 may lead to deeper retracements.

Outlook: Mixed Signals Create Opportunity and Risk

The strength of the US dollar and cautious Fed rhetoric on rate cuts present a mixed picture for the S&P 500. While the strong labor market and resilient corporate earnings lend support, tighter monetary policy could pressure valuations.

Investors are now awaiting key economic releases, including the final Michigan Consumer Sentiment Index and updated US S&P Global PMI data, which could provide further direction.

Despite these uncertainties, the broader market sentiment remains positive, with optimism surrounding potential fiscal stimulus from the incoming administration. This optimism, coupled with robust technical support levels, suggests that the index may continue to trend higher in the near term.

Key Insights:

• Initial Jobless Claims fell to 213,000, signaling labor market strength.

• Immediate resistance at 5,979; next targets are 6,009 and 6,046.

• RSI at 57.20 and 50 EMA at 5,912 support the bullish trend.