S&P 500: The market took a dive on Fed Chair Powell's comment while some Fed officials see little immediate threat from the Israel-Hamas war to the US economy


 

The index took a tumble for the week, down 2.39%, in response to Fed Chair Powell's comment on Thursday that "inflation is still too high". His comment sent the 10-year U.S. Treasury yield spiking to 4.98%, a 16-year high. To make matters worse, some Fed officials see little immediate threat from the Israel-Hamas war to the US economy, per CNN. Two-thirds of FOMC committee members believe that one more rate hike before the end of the year is appropriate, per the September Fed Minutes. The market was expecting the Middle East war to make them reconsider.

The S&P 500 could bounce off the trendline support but the bears could take the index down further to retest the 4,190 support level, ahead of the FOMC meeting next week. Keep an eye on the 10-year yield key resistance level at 5.26%, the June 2007 high.

This note contained herein is not and should not be construed as a recommendation to buy or sell. Click here to view the latest update!

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