S&P 500 futures climbed 1.2% to 6,368
points this week, marking four new all-time highs. The current peak stands at
6,385, and momentum suggests further upside is possible, with the 6,450 level
now in play. The rally was fuelled by a string of supportive developments. U.S.
Treasury Secretary Scott Bessent publicly backed Fed Chair Jerome Powell, while
President Donald Trump announced a “big deal” with Japan. Corporate earnings
added to the upbeat tone, with both Alphabet (GOOG) and Tesla (TSLA) beating
Wall Street expectations on revenue and profit, though Tesla’s report raised
concerns over operational risks, potentially linked to Elon Musk’s political
engagements.
Economic data was mixed but leaned positive.
While manufacturing PMI declined, services surged, lifting the composite index
from 52.9 to 54.6—indicating accelerating growth in July. Adding a political
twist, Trump made a surprise visit to the Federal Reserve on Thursday,
questioning Powell about renovation costs. Though confrontational in tone, Trump
later affirmed he would not seek Powell’s removal, but urged the Fed to
consider rate cuts.
Despite the gains, some institutional
investors are booking profits, with $2.17 billion withdrawn from the SPDR
S&P 500 ETF Trust (SPY) this week. The S&P 500 is now within striking
distance of the 6,450–6,470 resistance range, but any breakout may be
difficult, especially as the likelihood of a correction increases in the second
half of August.
Markets are bracing for a high-impact week.
Key events include the Fed interest rate decision, Nonfarm Payrolls, Q2 GDP,
and PCE inflation. Additionally, earnings from Microsoft (MSFT), Meta (META),
Apple (AAPL), and Amazon (AMZN) could provide much-needed support. The market's
focus will centre on whether Powell delivers the "right" decision as
hinted by Trump. A dovish surprise may extend gains, while any disappointment
could be cushioned by strong tech earnings.
The technical outlook for the S&P 500 has
deteriorated slightly. The benchmark reached the extreme target zone of
6,350–6,450 points and is currently holding just above resistance at
6,350–6,370, increasing the chances of a move toward the next resistance level
at 6,450–6,470 points. A breakout here will be extremely difficult. In the
second half of August, the likelihood of a correction rises.
Brent crude continues to consolidate, with
support shifting upward to $71–$73 per barrel. While prices have failed to
rally, their stability signals underlying strength. A breakout could target
$81–$83. Failure to hold support could see a retreat toward $61–$63.
Gold remains locked in a narrow summer range
between $3,250 and $3,450 per ounce. Current prices around $3,343 reflect a
market in wait-and-see mode. A breakout is unlikely before mid-August. A firm
close below $3,230 would be required to signal a deeper correction.
The U.S. Dollar softened, lifting the EURUSD
to 1.17880. However, a renewed slide remains on the table, with the
1.15000–1.15500 zone acting as a potential magnet. Last week’s low at 1.15560
confirms downside pressure remains intact, despite the recent bounce.