The S&P 500 broad market index futures
rose by 0.5% to 6,678 points this week, successfully retesting resistance at
6,640 and significantly raising the probability of an extreme rally toward
6,900–7,000. Inflation data came
in line with expectations, as headline PCE increased to 2.7% YoY in August from 2.6%, while core PCE, excluding food and energy, held
steady at 2.9%. Combined with the upward revision of U.S. Q2 GDP to 3.8% QoQ from 3.3%, these results could support a more cautious Federal Reserve (Fed)
stance. However, the next decisive move for markets
depends on the potential U.S. government shutdown on Wednesday and the upcoming
Nonfarm Payrolls data.
The U.S. labour market
report is due on Friday, though a shutdown could delay its publication.U.S. President Donald Trump has agreed to meet congressional leaders on
Monday, but if no progress is made, a shutdown may become unavoidable, leaving
no officials to release economic data. If job market
strength continues, fewer reasons for rate cuts will remain, making a data
release less favourable from Trump’s perspective. If labour market cooling
persists into autumn, however, publishing the report sooner would be
politically advantageous. While opinions differ, large investors appear to be
betting on a last-minute deal to prevent a shutdown.
The SPDR S&P 500 ETF Trust saw net inflows
of $11.34 billion last week, up sharply from $5.30 billion in the first half of
the week, marking the largest inflows since April, when $19.3 billion entered
the market ahead of a powerful rally. Current flows suggest large players are
positioning for another strong move toward 6,900–7,000, reinforced by the
successful retest of resistance at 6,620–6,640. Expectations are growing that
the shutdown will be avoided, with possible positive news emerging early in the
week, shifting focus back to labour market conditions.
ADP will release private payroll data on
Wednesday, with forecasts pointing to 53,000 new jobs in September, down
slightly from 54,000 in August. The same day will bring U.S. manufacturing PMI
figures, with consensus anticipating a modest improvement. Should the shutdown
risk be lifted, attention will quickly turn to Friday’s official Nonfarm
Payrolls report.
Technically, the S&P 500 outlook has
improved. The benchmark moved above its primary target of 6,500–6,600 to 6,679
points, confirming a breakout with the retest of 6,620–6,640 and paving the way
toward 6,900–7,000. A correction would only become likely if the index retreats
back to support at 6,520–6,540.
In the oil market, Brent crude remains in a
technically unfavourable phase expected to last through October. Prices are
trading at $68.31, just above the $66.00–$68.00 support zone. A retest of
$68.00 is required to confirm a rebound, with the next resistance at
$76.00–$78.00 and deeper support at $56.00–$58.00.
Gold has advanced beyond the $3,760–$3,780 per
troy ounce resistance zone and is now targeting $3,850–$3,950. However,
overbought conditions are at record levels, and the next resistance at
$3,860–$3,880 will be a critical test.
In the currency
market, the EURUSD remains volatile. Attempts
to reach the extreme target of 1.19500–1.20500 were stopped by hawkish remarks
from Fed Chair Jerome Powell, which capped the rally at 1.19180. The pair then
fell to 1.16450, breaking below the 1.17000 support level, which suggested
downside risks. Strong rebound attempts are underway, but no clear trend has
formed, leaving both a move above 1.19000 and a drop below 1.15000 possible.