S&P 500 broad market index futures slipped 0.64% this week to 6,616
points, after briefly falling as much as 1.40% to 6,568 on Thursday. The
benchmark continues to wrestle with resistance at 6,620–6,640, and a failed
retest here would sharply raise the risk of a 6–8% correction.
The week began on a
strong note, as Nvidia lifted markets with news of $120 billion in planned
investments into OpenAI, propelling the index to a record 6,698. Momentum faded
quickly, however, after Federal Reserve Chair Jerome Powell admitted the Fed
had overstated the inflationary effects of Trump’s tariffs but then issued a
stark warning that U.S. equities are overvalued. His comments, combined with renewed
shutdown concerns, triggered three consecutive down sessions.
Stronger-than-expected
macro data added another layer of caution. Q2 2025 GDP was revised up to 3.8% QoQ
from 3.3%, while jobless claims fell to 218,000 from 232,000. The data suggest
firmer labour conditions, dampening expectations for two further Fed cuts in
2025. The benchmark had dropped 1.0% to 6,568, with market players reluctant to
commit to a breakout above 6,620–6,640 until the shutdown question is resolved.
If Congress passes a funding bill before the October 1 deadline, the index
could rally toward 6,900–7,000, while a failure would likely cap gains and tilt
the odds toward correction.
Institutional flows
reinforce caution, as the SPDR S&P 500 ETF Trust saw $5.3 billion of
inflows early in the week mirroring a recent pattern. Yet in prior weeks these
were later reversed into outflows. With shutdown risk looming, sustained buying
looks unlikely.
From a technical
standpoint, the S&P 500 has met its primary target at 6,500–6,600 points and
now trades just below resistance at 6,620–6,640. A confirmed breakout could
activate the 6,900–7,000 extreme target, while a drop below 6,520–6,540 would
signal deeper correction risk.
Brent crude prices
moved above the $66.00–$68.00 support zone to $69.18, though a retest of $68.00
is needed to confirm the sustainability of the move. Next resistance lies at
$76.00–$78.00, with deeper support at $56.00–$58.00.
Gold prices advanced further towards
$3,760–$3,780 per troy ounce after clearing resistance at $3,600. If prices
hold above this range, the path toward $3,850–$3,950 will reopen, though
overbought conditions remain at record levels and the next resistance lies at
$3,860–$3,880.
In the currency
market, the EURUSD’s rally was halted twice, first at 1.19180 and then with a
drop below 1.17000 to 1.16450, hinting at reversal risk. However, a government
shutdown would likely weigh on the U.S. Dollar, creating a conflicting dynamic.