S&P 500 broad market index futures rose
0.78% to 6,634 points this week, setting a new all-time high at 6,659. Prices
have moved above the primary target at 6,600, and if the breakout of resistance
at 6,610–6,630 is confirmed, an extreme rally toward 6,850–6,950 could follow.
Tension, however, remains elevated. Federal Reserve Chair Jerome Powell
attempted to cool enthusiasm after the central bank cut rates by 25 basis
points and signalled two more cuts in 2025. Powell adopted a notably hawkish
tone during the press conference, emphasising inflation risks, concerns about
the cooling labour market, and the importance of central bank independence from
political pressures. His stance appeared aimed at demonstrating that recent
criticism from the White House did not influence the Fed’s actions.
Markets initially reacted with selling but
later resumed buying. Large investors also stepped back in, with the SPDR
S&P 500 ETF Trust (SPY) reporting net inflows of $3.65 billion this week,
consistent with the pattern of the past two weeks. In both earlier cases,
however, inflows reversed into outflows in the second half of the week. Until
full data confirm sustained institutional demand, the assumption remains that
large-scale withdrawals from SPY are continuing. This week could mark the sixth
consecutive week of net outflows.
Elsewhere, the Bank of Japan delivered an
unexpectedly hawkish message. Although interest rates were left unchanged at
0.50% as expected, the central bank announced plans to reduce its balance sheet
through annual sales of ¥330 billion in ETFs and ¥5 billion in REITs.
Additionally, two of its nine board members voted for a rate hike to 0.75%. The
Bank of Japan has long supported global markets, particularly U.S. equities, by
providing low-cost carry-trade funding. While the immediate impact of its move
is limited, a sustained shift could gradually weigh on U.S. market momentum,
especially if the U.S. Dollar does not weaken significantly.
Political developments may also influence
sentiment. U.S. President Donald Trump is expected to hold a phone call with
Chinese leader Xi Jinping, raising the possibility of renewed progress toward a
trade deal. Any sign of improved relations could further bolster confidence in
the S&P 500 breakout above 6,610–6,630.
From a technical perspective, the S&P 500
has achieved its primary target at 6,500–6,600 and is now trading above the
resistance zone of 6,610–6,630 points. A successful retest of this level should
open the way to the extreme target of 6,850–6,950, while a pullback could
trigger a meaningful correction. Immediate support lies at 6,510–6,530.
Commodity markets remain mixed. Brent crude
prices continue to move within the $66.00–$68.00 per barrel support zone and
are currently trading at $67.00. Resistance remains at $76.00–$78.00, while the
next support is located at $56.00–$58.00. The technically unfavourable phase
for oil is expected to persist through the end of October.
Gold prices surpassed the $3,500–$3,600 range
to set a new all-time high at $3,707 per troy ounce, appearing on course for
the extreme target of $3,850–$3,950. However, overbought conditions are at
record levels, raising caution despite the bullish trajectory.
Currency markets reflected the impact of
Powell’s comments. The euro had nearly reached the extreme target of
1.19500–1.20500, peaking at 1.19180 before retreating to 1.17660. Despite this
pullback, the broader trend remains intact, and as long as the euro holds above
1.17000, the path toward 1.19500 remains open.