The S&P 500 index has experienced a downturn, failing to sustain its upward trajectory and instead dipping from a high of 5,035.83 to an intraday low of 4,988.

This decline was largely influenced by the U.S. GDP growth rate for Q1 2024, which registered at a disappointing 1.6%, significantly below the forecasted 2.5% and previous quarter’s growth of 3.4%. This indicator of economic deceleration has imposed considerable downward pressure on the index.

Federal Reserve Policies Support Market Stability

In contrast to the dampening economic data, the Federal Reserve’s hawkish stance on maintaining higher interest rates has provided some underpinning for the SPX.

The core Personal Consumption Expenditure Price Index (PCE) for Q1 surged to 3.7%, exceeding both the prior expectation of 3.4% and the last period’s figure of 2%.

The persistence of inflation at such elevated levels signals the Fed’s continued commitment to stringent monetary policy, which in turn supports the U.S. dollar and may stabilize equity markets.

Geopolitical Ease Boosts Investor Confidence

The recent easing of geopolitical tensions in the Middle East has also played a crucial role in underpinning the S&P 500. Decreased military engagement and positive diplomatic movements have helped stabilize the global risk environment, enhancing investor confidence and contributing to potential gains in the index.

Anticipated Corporate Earnings to Guide Market Trends

The upcoming earnings reports on April 26, 2024, from major corporations like Exxon Mobil, Chevron, and AbbVie, will be pivotal. For instance, expectations set for Exxon Mobil’s earnings stand at $2.21 per share with revenues projected at $78.31 billion.

Similarly, Chevron is anticipated to post earnings of $2.96 per share with $47.19 billion in revenue. These reports will provide critical insights into the health of various sectors and are likely to influence the SPX’s short-term trajectory significantly.

In summary, the S&P 500 index is navigating through a complex economic landscape marked by lower-than-expected GDP growth and heightened inflation, juxtaposed with supportive Federal Reserve policies and improving geopolitical conditions.

S&P 500 (SPX) Price Forecast

S&P500’s pivot point is set at 5,137.05, suggesting that a move above this level could signal renewed bullish activity. Immediate resistance levels were noted at 5,107.34, with further barriers at 5,173.51 and 5,263.93. Breaching these levels could indicate a return to stronger bullish trends for the index.

On the downside, the index finds immediate support at 4,953.05, with additional support levels at 4,883.16 and 4,802.48. These marks are crucial as they represent levels where the index might find stability and potentially rally if bearish pressure persists.

Technical indicators reveal the Relative Strength Index (RSI) at 44, which points to a market that is neither overbought nor oversold, but slightly leaning towards the oversold condition. This positioning suggests there may be room for a rebound if market conditions improve.

Additionally, the 50-Day Exponential Moving Average (EMA) stands at 5,102.24, just above the closing price, indicating that the index is challenging important support zones.