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S&P 500 tumbles as US Inflation simmers

The S&P 500 received a thorough beating on Wednesday afternoon after U.S inflation data failed to calm investor concerns about rising interest rates.

US consumer prices rose at an annual pace of 8.3% last month, more than economists’ expectations and staying at a four-decade high! With the S&P 500 concluding yesterday’s session below 4,000 for the first time since late March 2021, bears are certainly in the building.

S&P 500 H4

This has been a rough week for the index has shed over 4.5% since Monday and sinking closer to an official technical ‘bear market’ – a period where prices have fallen 20% or more from a recent peak. It is worth keeping in mind that back in the early parts of April, the S&P 500 hit a 52-week high around 4819.7. Prices have dropped over 13% since then with bears greedily eyeing fresh levels of support to conquer.

S&P500 W1

Taking a look at the technical picture, prices are heavily bearish on the daily timeframe. There have been consistently lower lows and lower highs while prices are trading below the 50 and 100-day Simple Moving Averages. The daily close below 4000 may encourage a decline towards 3880 and 3750 respectively. Should prices push back above 4000, this could trigger a move back towards 4080.

S&P 500 D1

Zooming out on the monthly, bears seem to be gaining momentum and have been in control since prices secured a solid close below the 4520 and 4200 higher lows. The trend is turning bearish with the first key level of interest found at 3750. If this level proves to be reliable support, a rebound back towards 4200 could be on the cards before bears re-try their luck.

S&P 500 M1


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