The S&P 500 broad market index futures
rose 0.44% this week to 6,496 points, just below the new all-time high of 6,508
set earlier. Attention now turns to the July Personal Consumption Expenditures
(PCE) price index. Markets expect the headline figure to hold at 2.6% YoY,
while the core PCE may rise slightly from 2.8% to 2.9% YoY.
The Federal Reserve (Fed) has already
signalled a September rate cut. Notably, the Q2 GDP report included a downward
revision of core PCE inflation to 2.0% YoY from 3.7%, reinforcing evidence of
easing inflationary pressures.
Political developments have also drawn
attention. U.S President Donald Trump has exerted pressure on Fed Chair Jerome
Powell with the dismissal of FOMC member Lisa Cook. If the courts confirm the
legality of her removal, Powell faces a difficult choice: either allow her
participation in the September meeting, which could invite a challenge to his
authority, or exclude her, which would be seen as yielding to the White House.
Either way, Powell’s independence has been questioned, though markets appear to
view the situation as manageable.
The positive market response reflects a
broader backdrop of strong fundamentals. Trump’s tax cuts continue to support
corporate earnings, Nvidia (NVDA) posted stronger-than-expected results, and
U.S. Q2 GDP growth was revised up to 3.3% QoQ from 3.0%. Investor sentiment has
turned more confident, as evidenced by $2.37 billion of net inflows into the
SPDR S&P 500 ETF Trust (SPY) this week, following sizeable outflows in the
prior two weeks.
Looking ahead, the August U.S. jobs report
will be a key release. Consensus expects a cooling labour market, with
unemployment rising to 4.3% from 4.2%.
From a technical perspective, S&P 500 index
has reached and exceeded their initial target, pushing the outlook higher into
the 6,500–6,600 zone. Immediate resistance is at 6,500–6,520. A confirmed
breakout above this level could extend gains toward 6,600–6,620, with the
extreme target at 6,850–6,950. Near-term support stands at 6,400–6,420.
In commodities, Brent crude remains under
pressure within the $66.00–$68.00 support range, last trading at $67.98.
Downside momentum stems from OPEC+’s plan to boost production by 548,000
barrels per day from September. Resistance is seen at $76.00–$78.00, while the next
major support lies at $56.00–$58.00.
Gold continues to consolidate, holding the
$3,230–$3,250 support zone and moving closer to the $3,430–$3,450 resistance
area. Prices last traded at $3,412 per troy pounce. The market appears poised
for a breakout, with an upside target of $3,500–$3,600 if resistance is
cleared.
In the currency markets, the U.S. Dollar
strengthened early in the week but later reversed. The EURUSD has returned to
the 1.1600–1.1700 target zone, holding above support. If the pair sustains a
move above 1.1700, the next upside target of 1.1950–1.2050 could come into
focus.