S&P 500 Index Price Falls Amid Negative News
Yesterday, disappointing news about the US economy was released. According to ForexFactory:
The ISM Manufacturing PMI fell from 48.5 to 46.8 (analysts expected a rise to 48.8), indicating a decline in industrial production.
The number of unemployment benefit claims reached 249,000 the highest in 12 months.
As a result, US stock indices declined, with bearish sentiment further driven by weak Q2 reports from several companies:
Intel decided to halt dividend payments (INTC shares plummeted by 19%).
Amazon reported a revenue decline (AMZN shares dropped by 6%).
The outperformance of sectors such as consumer staples, healthcare, and utilities compared to technology stocks suggests that investors fear a recession and are rotating into more stable assets.
Meanwhile, the daily S&P 500 chart (US SPX 500 mini on FXOpen) indicates a vulnerable position since mid-April, the price has been moving within an upward channel (shown in blue), but today it is near the lower boundary, creating a risk of a bearish breakout.
Technical analysis of the S&P 500 (US SPX 500 mini on FXOpen):
Having twice acted as support, the 5585 level has become resistance (as indicated by the arrows). A similar transformation may occur with the psychological level of 5400.
The lower highs in July provide grounds to define the contours of a downward channel, which will gain more relevance if the bears manage to push the price through the lower blue boundary intensifying recession talks.
Read more: https://fxopen.com/blog/en/oa-s-p-500-index-price-falls-amid-negative-news/
Text source: Forex Trading Blog
