S&P 500 needs to rest after rally

The S&P 500 index opened at 6,654.7 on September 22, 2025. The price fluctuated near this level during early trading, showing signs of consolidation after the recent rally triggered by the Federal Reserve’s (Fed) decision to cut interest rates. Although this step was widely expected and factored in, a dovish stance from the US central bank increased interest among buyers, causing short-term quotes growth. The market is typically weak in September, but this year, the picture is totally different.

By now, most positive changes have already been priced into the current SPX value. The index has hit all-time highs, while its forward P/E ratio is at 23, which is two standard deviations above the average for the last 15 years. These levels indicate optimistic sentiment among investors. Nevertheless, their assessments could be affected by unexpected and unpleasant changes in employment and inflation data.

New growth catalysts will require confirmation through strong macroeconomic indicators and financial reports. Disappointing data could trigger profit-taking and a correction. This scenario is confirmed by the significant capital outflows from the stock market recorded by LSEG Lipper last week.

Geopolitical and US political factors also remain important. Though most of them do not have a direct impact on prices yet, their escalation may change the perception of risky assets.

Technically, there is a continuation of the uptrend within the established channel. The RSI (14) is at 78, which supports this movement and indicates strong growth momentum, with overbought territory in sight. This may also signal a possible correction. At the same time, the Chaikin Oscillator fell during early trading, suggesting that a pause is needed after the rally.

Pay attention to the following trading strategy:

Sell the S&P 500 index amid a probable correction. Take profit: 6,570. Stop loss: 6,730.

This forecast remains valid between September 22 and September 29, 2025.