S&P 500 index hits highest in nearly a year

On Monday evening, US market futures rose after it appeared like Washington would reach an agreement to raise the $31.4 trillion debt ceiling and avoid defaults. The accord is scheduled to be voted on later this week.

President Biden and Republican House Speaker Kevin McCarthy are expected to agree to lift the debt ceiling until January 2025 in exchange for a cap on defense spending and cuts to government projects over the following two years. As a result, some investors are concerned that anticipated government spending cuts may harm overall US growth. At the same time, the United States may be unable to avoid a credit rating drop, which might result in increased US borrowing rates.

However, the relaxing of the debt ceiling agreement caused AI-related stocks underpinning the S&P 500 to close at their highest level since August 2022 late last week, including the resurgence of stocks in the defense business sector, cyclical stocks, and energy stocks.

Analysts predict the deal to have a minor positive impact on equity markets, but it may give additional momentum for equities in some sectors, such as those of companies with poor balance sheets and small stocks, and may support riskier assets. While investors are bracing for probable volatility in the US Treasury bond market if the debt ceiling is lifted, which will support bond yields and the dollar.

Investors will continue to examine further US economic data this week, such as the Housing Price Index and CB Consumer Confidence data, as well as earnings from firms such as HP Inc (NYSE:HPQ), Box Inc (NYSE:BOX), and U-Haul Holding Co (NYSE:UHAL).

Data for Technical Analysis (5H) CFD US 500 [S&P 500]

Resistance : 4219.8, 4221.8, 4225.0

Support : 4213.4, 4211.4, 4208.2                            

5H Outlook

Source: Investing.com            

Buy/Long 1 If the support at the price range 4208.4 - 4213.4 is touched, but the support at 4213.4 cannot be broken, the TP may be set around 4220.5 and the SL around 4204.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 4219.8 - 4224.8, TP may be set around 4228.0 and SL around 4209.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 4219.8 - 4224.8 is touched, but the resistance at 4219.8 cannot be broken, the TP may be set around 4212.1 and the SL around 4228.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 4208.4 - 4213.4, TP may be set around 4204.0 and SL around 4224.0, or up to the risk appetite.       

Pivot Points May 30, 2023 03:00AM GMT

Sources: Investing 1, Investing 2