S&P 500 broad
market index futures rose 0.4% to 6,743 points this week, continuing their
advance toward the extreme target of 6,900–7,000 points while pressing against
the resistance zone at 6,720–6,740. Once this level is
cleared, the rally is expected to accelerate. Federal Reserve (Fed) Chair
Jerome Powell stepped back from public appearances this week, cancelling his
anticipated policy remarks at a banking conference on Thursday and delivering
only a brief welcome address with no reference to monetary policy. In
hindsight, this may have been the most prudent move.
The U.S. Bureau of Labor Statistics (BLS) is
rumoured to have recalled staff to prepare the September inflation report.
Given the ongoing government shutdown, publication of CPI and Nonfarm Payrolls
was not expected, but the data release is now reportedly scheduled for next
Wednesday. Powell is set to speak again on Tuesday, suggesting he intends to
wait for fresh inflation data before clarifying the Fed’s stance. Otherwise, he
risks facing sharp criticism from President Donald Trump, who may be preparing
a disinflationary surprise for markets. It is worth noting that the head of the
BLS is a Trump appointee, adding political intrigue to the timing of the
release.
If this narrative proves accurate, next week
could become another record-setting one for the S&P 500. The U.S. corporate
earnings season is beginning, led as usual by major banks, and expectations are
strong. A combination of Powell’s dovish tone, disinflation signals, and robust
bank earnings could push the benchmark all the way toward the 6,900–7,000
range. Large investors appear aligned with this view. Net inflows into the SPDR
S&P 500 ETF Trust (SPY) reached $4.26 billion this week. If positive
inflows continue, following last week’s $11.34 billion, it would confirm that
institutional money remains committed to the rally.
Meanwhile, there are signs of potential
progress in the budget standoff. Democratic lawmakers have hinted that
Republicans may be softening their stance, though confirmation is lacking.
Negotiation activity appears to be intensifying, and the probability of ending
the shutdown next week is rising.
Technically, the S&P 500 remains in a firm
bullish formation. The benchmark has surpassed its primary target of
6,500–6,600 and now trades at 6,743, testing resistance at 6,720–6,740. A
confirmed breakout above this zone would likely accelerate the rally toward
6,900–7,000, with the next resistance seen at 6,820–6,840.
In the oil market, the unfavourable phase
continues and is expected to persist until late October. Brent crude initially
bounced from support at $65.00 per barrel but retreated after hitting
resistance at $67.00, now retesting $65.00 at the current level of $64.80.
Israel and Hamas have reportedly signed the first phase of a peace agreement,
signalling the unwinding of the geopolitical risk premium that has supported
oil prices. If $65.00 fails to hold, a decline toward the next support at
$55.00–$57.00, near the bearish target of $45.00–$55.00, is possible.
Gold briefly surpassed its extreme target of
$3,850–$3,950, reaching a new all-time high of $4,059 per troy ounce before
retreating on news of a potential Middle East ceasefire. A reversal pattern may
now be forming, though this process could take time. The metal remains at
historically overbought levels, and while shorting gold at these highs carries
significant risk, a corrective phase appears increasingly likely.
In the currency market, the EURUSD fell 1.68%
to 1.15410 as political instability in France continued to weigh on the Euro.
The pair is clearly oversold, with an open gap at 1.17380 that could become the
target for a rebound. Beyond that, the direction remains uncertain: both a
recovery above 1.19000 and a further decline below 1.15000 are possible. A
sustained break above 1.17600–1.17800 would signal a return to a bullish
trajectory.