S&P 500 looking for recovery bounce from days lows near $4,323

• S&P 500 sharply lower for Thursday after US CPI inflation reading sends investor confidence lower.
• Safe havens are catching a bid and equities stumbled as investors fear the Fed.
• S&P 500 sees peak-to-trough decline of 1.65% on inflation expectations adjustment.

The Standard & Poor’s 500 equity index saw a sharp downstep on Thursday after US Consumer Price Index (CPI) inflation figures beat market expectations, with the annualized CPI for September printing at 3.7%, holding steady with the previous reading and snubbing the market’s forecast decline to 3.6%.

US CPI inflation holds steady at 3.7% in September vs. 3.6% forecast

The data move was minor, but enough to reignite fears of the Federal Reserve’s (Fed) higher-for-longer policy stance on interest rates, with sticky inflation in the US set to push out expectations of an eagerly-anticipated rate cut from the US central bank even further into the future.

Markets are currently pricing in an eventual half-point rate cut sometime in 2024, but if inflation continues to edge higher against forecasts, it could see the Fed’s dot plot continue to shift further out.

S&P 500 Technical Outlook

Intraday action as the S&P 500 down past the 50-hour Simple Moving Average (SMA) as Thursday’s risk-off plunge sends the major equity index down below the near-term median, but stocks are seeing some mild bidding in a rebound as the S&P recovers to $4,350.

The S&P 500 is still in the green for the trading week, trading up nearly 1.2% from Monday’s early opening bids near $4,300.

The S&P 500 has formed a bearish engulfing candle on the daily timeframe, and the equity ticker is set for a continuation of a bearish turnaround from the 50-day SMA at $4,406. The S&P 500 caught a bullish bounce last week from the 200-day SMA near $4,220.

The index still remains on the low end in the medium term and could see Thursday’s backslide firming up an extension into a lower-high pattern.

S&P 500 Hourly Chart

S&P 500 Daily Chart

S&P 500 Technical Levels