The S&P 500 and stock futures fell on October 31, as investors digested the not-so-good results of technology corporations and, on the other hand, looked forward to reports from Apple and amazon.
S&P 500 Futures fell 0.5%, with Nasdaq 100 and Dow Jones futures also falling 0.6% a day after US CPI annual changes rose 8.3% compared to the previous year.
Meta Platforms' pre-market performance contributed to the cautious sentiment. Shares fell 3% as the company missed its user growth goals. Additionally, Meta announced that capital expenditures will increase sharply in 2025, which contrasts with its strong third-quarter earnings.
Microsoft's revenue projections failed to entice investors, leading to a 4% drop in its stock price in premarket trading as Wall Street altered its growth expectations in light of the weak outlook. of the company.
Wall Street expects key tech gains from Apple and amazon
On the economic side, the latest personal consumption expenditure (PCE) price index was published. This index, a key inflation indicator for the Federal Reserve, showed that inflation increased as expected, approaching the Federal Reserve's 2% target. These data suggest that inflation may be declining. However, investors remain cautious. They fear how slow corporate profit growth and inflation could affect overall market sentiment.
On October 30, the main stock indices showed slight falls; the S&P 500 fell 0.3%, the Dow Jones 0.2% and the Nasdaq Composite 0.6%. As far as Wall Street is concerned, investor attention has been focused on the results of Apple and amazon, particularly with regard to the viability of the development of the technology sector amid a deteriorating economic environment. Announcements from these companies will most likely be the turning point of earnings season.
Technical analysis of the S&P 500 index
S&P500/USD 15-minute chart (Source: TradingView)
Today the S&P 500 index is experiencing slight pressure. The price stands at 5,813.66, the same percentage less than before. Over the past week, the index reached a high of 5,878.46. Since then, it has been gradually declining, forming lower highs and lower lows. Therefore, the likely conclusion is that momentum is slowing and a cautious sentiment is taking over.
Key support at 5,762.41 in focus as near-term downtrend prevails
The Relative Strength Index (RSI) for S&P 500 stocks currently stands at 32.12, fairly close to oversold territory. However, the RSI is trending downwards. The 15-minute chart also shows a series of unbroken red candles. This indicates that for now, the short-term bears are in control and are dominating the bulls.
It is imperative to monitor the nearest support level of 5,762.41. When a state of stability emerges among traders and the RSI starts trending up, it can boost buyers' confidence. This bullish move could indicate a short-term buying opportunity.
In the short term, we are likely to see a cautious trading style. This is shown in situations within a limited range in the market as investors monitor external factors such as upcoming economic data and macroeconomic news. A move above the recent high of 5,840 could indicate a revitalization of buying interest in this stock.
In case you are already holding positions, watch the resistance line around 5,840 and be very careful about it as breaking it may signal a return to the uptrend. Keep an eye on the latest economic data releases as they are a major driver of market psychology.
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