- S&P 500 hits its highest prices in two weeks as equities rally off weekend Gaza jitters.
- US equities dipped to kick off the trading week after Hamas rocket attacks over the weekend, but investors recovered their mood into the midday.
- Markets will be turning their eyes ahead to US inflation figures due in the mid-week.
The Standard & Poor’s (S&P) 500 equity index is trading near $4,330, a two-week high for the index after markets recovered from an early Monday spat of risk aversion sparked by escalating tensions in the Gaza Strip over the weekend.
Palestine’s Hamas launched a deadly rocket attack over the weekend that left over 700 Israelis dead, with at least 12 American citizens confirmed killed in the altercation; Israel’s retaliation saw nearly 700 Palestinians slain following the rocket attack, and broader markets are concerned that the largest exchange of violence for the region in over a decade will hamper trade and production in the region.
Oil markets were particularly exposed to risk aversion on the Gaza conflict, with concerns that nearby Iran and Saudi Arabia would get pulled into the conflict politically, which could threaten crude oil production that is already slated to drastically undershoot global demand through the remainder of the year.
The S&P 500 hit a daily low of $4,266.90 in early Monday trading before recovering back over the $4,300 handle and heads into the Tuesday trading session testing territory north of $4,330.
Forex Today: US Dollar weakens despite Middle East concerns
Concerns about a rebound in US inflation pushing the Federal Reserve (Fed) further away from making any interest rate cuts in the near future remain a constant concern for investors, and markets will be looking ahead to this week’s smattering of inflation data and US consumer sentiment figures.
Tuesday brings a collection of speeches from Fed officials, including Waller, Kashkari, and Daly; on Wednesday the latest Producer Price Index drops, with the annualized period into September expected to show a slight uptick into 2.3% from 2.2%.
Thursday will see US Consumer Price Index (CPI) figures, forecast to decline softly for the same period to 4.1% from 4.3%, which would see inflation still well above the Fed’s 2% inflation target.
Friday will close out the trading week with the Michigan Consumer Sentiment Index, which is forecast to fall back slightly from 68.1 to 67.4.
S&P 500 Technical Outlook
The S&P 500 is on the high side near $4,333.90 after rebounding from last week’s low of $4,199.80.
Hourly candles succeeded in vaulting over the 200-hour Simple Moving Average, and now bulls will be looking to turn recent swing-high points near $4,320.00 into technical support for a further move high.
Daily candlesticks have the S&P 500 building out a technical rebound from a rejection of the 200-day SMA near $4,200.00, but market moves may run aground technical resistance from the 50-day SMA which sees bearish momentum into $4,400.00.
S&P Daily Chart
S&P 500 Technical Levels