S&P 500 broad market index futures rose
0.4% to 6,738 points, keeping the benchmark firmly on course toward its extreme
target of 6,900–7,000. Trading opened with a gap on Monday, up from Friday’s
close at 6,713 points, suggesting a potential pullback to close the gap before
the upward move resumes. U.S. markets ended last week under pressure from
weakening services sector data. S&P Global’s September Services PMI slipped
to 54.2 from 54.5, slightly better than the forecast of 53.9, while the ISM
reading dropped sharply to 49.9 from 55.0, its lowest level since June 2024.
Wall Street had expected a smaller decline to 51.8. The benchmark initially
fell 0.3% to 6,717 points following the release but rebounded 0.5% to set a new
all-time high at 6,751. Attempts by U.S. lawmakers to resolve the ongoing
government shutdown failed once again, with the third vote on a temporary
funding bill producing no agreement. The S&P 500 gave up its Friday gains
following the news.
Weekly inflows into the SPDR S&P 500 ETF
Trust (SPY) cooled to $986.2 million from $7.23 billion in the first half of
the previous week, reflecting slower institutional momentum. However, when
combined with the earlier $11.34 billion inflow, this still signals that large
investors remain active participants in the rally toward 6,900–7,000 points.
The FOMC Minutes from the Federal Reserve’s
last meeting will be published on Wednesday. The Fed cut interest rates in
September for the first time since 2024 and updated its dot plot to include two
additional cuts in 2025. Despite that, Chair Jerome Powell has continued to
sound cautious in his recent comments. He is set to speak again the day after
the Minutes are released, this time without official September jobs data, which
remain unpublished due to the government shutdown. However, Powell may consider
the weak ADP Nonfarm Payrolls report showing job losses, which could lead to
less hawkish remarks, a scenario that would likely support further gains in the
S&P 500.
Efforts to end the shutdown are ongoing, with
Republicans maintaining pressure and showing little urgency to compromise.
According to Bank of America, the current impasse could last around eight days,
potentially ending on Thursday. If that happens, the Bureau of Labor Statistics
could release the delayed September jobs report on Friday, which might trigger
a sharp rise in market volatility.
The technical outlook for the S&P 500
remains unchanged. Futures have broken above the 6,500–6,600 target range
within the bullish pattern, with the index now trading inside the intermediate
resistance zone of 6,720–6,740. A clear breakout above this area would likely
accelerate the rally toward the extreme target of 6,900–7,000. The next
resistance is located at 6,820–6,840.
In the oil market, the unfavourable technical
phase persists and is expected to last until late October. Brent crude prices
have bounced off support at $65.00 per barrel, currently trading at $65.60.
Over the weekend, OPEC+ announced a production increase of 137,000 barrels per
day starting in November, smaller than anticipated, providing temporary relief.
Nonetheless, this move is unlikely to prevent renewed downward pressure. A
break below $65.00 could open the way to the next support zone at $55.00–$57.00
and potentially to $45.00–$55.00.
Gold prices continue to hover near the
resistance zone of $3,850–$3,950 per troy ounce, extending gains on momentum. A
reversal pattern may begin forming soon, although the process could take time.
The metal remains at record overbought levels, making premature short positions
highly risky.
In the currency market, uncertainty remains
high. The EURUSD pair was unable to reach its extreme target of 1.19500–1.20500
after hawkish comments from Fed Chair Powell halted the rally at 1.19180. The
pair subsequently fell to 1.16450, breaking below the key 1.17000 support
level, suggesting potential for further downside. However, a rebound attempt is
underway. Another French government resignation briefly pushed the pair down to
1.16510, but no clear direction has yet emerged. Both a move above 1.19000 and
a drop below 1.15000 remain possible, while a sustained breakout above
1.17600–1.17800 would signal a resumption of the bullish trend toward 1.19000.