The S&P 500 has drifted higher but stayed mostly rangebound since the last FOMC decision, and traders are holding fire until the US CPI report. An NFP print that was not bad has already nudged rate-hike bets lower, and the inflation data now shapes the next move.
The S&P 500 is grinding slowly higher while the market waits for the US CPI report, and until that print lands the index is likely to stay rangebound. The tone has kept a bullish tilt since the last FOMC decision, but the next real catalyst is the inflation data rather than anything on this week’s thin agenda.
Rate-hike bets ease after the jobs report
The only major catalyst since the FOMC decision was the NFP report, and while the data was not weak it was enough to trigger a slightly dovish repricing in rate expectations. The chances of a July rate hike now stand at just 25%, with September down to 57%. Because the Fed is focused on inflation, though, the CPI print carries more weight than the labor data did.
CPI sets the near-term direction
The report cuts both ways. An upside surprise would likely spark a selloff toward the 7,200 support, while in-line or softer figures should keep supporting the index on lower Fed tightening risk. On the daily chart the S&P 500 is slowly approaching its all-time highs around 7,650, a level where sellers may step in to position for a drop back to 7,200.
The recent bullish tilt showed up on Monday, July 6, when all major indices rose together — the S&P 500 up 0.72%, the Dow 30 up 0.29% and the Nasdaq 100 up 1.26%. Away from the data, the only other item on the calendar is the FOMC meeting minutes, which are almost never market-moving. Traders will still comb them for any further signal on the next policy step.
Sources: investingLive, Trefis
Trading involves risk.
Risk Disclaimer
