The S&P 500 (CME: ES) is experiencing short-term selling pressure following the release of hotter-than-expected Nonfarm Payroll data, hinted at a resilient labour market, reducing hopes of imminent interest rate cuts in the coming year.
The stronger-than-anticipated jobs report, which showed the US economy added 199,000 jobs in November, sparked concerns among investors that interest rate cuts may be further delayed. This dampened the bullish sentiment that had driven the S&P 500 to six consecutive weeks of gains.
Technical Analysis
At the current level of 4,554.25, the S&P 500 Index Futures exhibit a downward trend post the NFP report, trading above the 20-SMA (green line), 50-SMA (blue line), and 100-SMA (orange line). The RSI indicates a sharp decline at 61.93, signifying a bearish sentiment in the short term.
The immediate support for the S&P 500 lies at 4,604.25, followed by 4,577.25 and 4,551.25. If prices manage to hold above these levels, we could see a renewed attempt at the highs. However, a breakdown below these supports could lead to further selling pressure.
On the upside, the initial resistance for the S&P 500 stands at 4,648.00, followed by 4,668.25. A break above these levels could trigger a fresh wave of buying and potentially push the index towards new highs.
Summary
The upcoming days will be crucial for the S&P 500 futures as investors grapple with the implications of the strong jobs data and the Federal Reserve’s policy trajectory. Close attention will be paid to economic data releases and any signals from the central bank for clues about future interest rate cuts.
Sources: TradingView, Reuters, Trading Economics, MarketWatch, U.S. Bureau of Labor Statistics, Dow Jones Newswire.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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