U.S. Stocks Rise Amidst Rate Cut Optimism and Earnings Reports

U.S. stock indexes rose for the third consecutive session on Monday, fueled by growing investor optimism about potential interest rate cuts by the Federal Reserve this year, as soft April employment data prompted many investors to revise their forecasts. Market attention turned to upcoming speeches by Fed officials for further insights into future interest rate policies. Notable companies like Walt Disney and Wynn Resorts were among those scheduled to announce their latest quarterly earnings, adding to market sentiment.

U.S. stocks closed higher on Monday, with gains particularly notable in the Technology, Consumer Services, and Financials sectors. The energy index also saw gains, partly due to a surge in U.S. natural gas futures. Chipmakers experienced broad gains, with notable increases seen in Arm Holdings, Micron Technology, Advanced Micro Devices, and Super Micro Computer. Media company Paramount Global advanced after ending exclusive negotiations with Skydance Media, while Tyson Foods fell despite surpassing profit expectations due to inflation concerns. Spirit Airlines slumped to a record low after reporting a weak revenue outlook.

Chip stocks received a boost from upgrades and optimistic analyst outlooks, contributing to sector-wide gains. Mixed economic signals continue to drive market fluctuations, which have led to fluctuations in both stock and bond markets.

The upcoming week is marked by major earnings reports from companies like Walt Disney, Reddit, and Arm Holdings, with public cloud trends and significant capital expenditures among tech giants being notable factors. Market sentiment remains somewhat cautious despite positive earnings reports, with attention on factors like EPS revisions, shareholder returns, and AI investments.

Expectations for a September Fed rate cut grew following softer-than-expected April nonfarm payroll data, signaling a cooling labor market and easing inflation concerns. However, uncertainty looms over a ceasefire deal in Gaza as Israel reportedly signals reluctance to accept certain terms. Consequently, it could impact the broader U.S. stock market, potentially leading to a modest uptick amidst volatility and the possibility of a downturn reversal.

Data for Technical Analysis (1D) CFD US 500 [S&P 500]

Resistance : 5202.97, 5276.22, 5394.79

Support : 4965.83, 4892.58, 4774.01          

1D Outlook

Source: TradingView

Buy/Long 1 If the support at the price range 4890.83 - 4965.83 is touched, but the support at 4965.83 cannot be broken, the TP may be set around 5202.97 and the SL around 4853.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 5202.97 - 5277.97, TP may be set around 5394.00 and SL around 4928.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 5202.97 - 5277.97 is touched, but the resistance at 5202.97 cannot be broken, the TP may be set around 4965.83 and the SL around 5315.00, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 4890.83 - 4965.83, TP may be set around 4774.00 and SL around 5240.00, or up to the risk appetite.       

Pivot Points May 7, 2024 06:20AM GMT