Sell SPX down to $7,200 as markets rethink Fed's next monetary move

The S&P 500 Index is currently feeling the heat. After a brutal sell-off that began on June 3, SPX is desperately trying to regain some ground during today's trading session. What sparked the chaos? Rising geopolitical tensions lit the fuse, and stronger‑than‑expected US economic data poured gasoline on the fire, thus raising the odds of monetary tightening later this year.

Let's rewind to the very trigger. In fact, it all started with the latest escalation in the Middle East—this was the domino that toppled the market. The fallout was almost instant: Brent crude shot past $94 per barrel. With the fragile April ceasefire now hanging by a thread, investors rushed into safe havens, pushing risk appetite down to levels not seen in weeks.

Then came the economic gut punch. Fresh US data showed inflation accelerating to 4.2% year‑on‑year in May—the highest since April 2023—while the labor market refused to crack. This forced traders to abandon their previous monetary predictions. The probability of a Federal Reserve (Fed) interest rate hike at the October meeting has now surged past 50%. All eyes are also glued to the June 17 central bank meeting, which could deliver the hawkish news that no one in equity circles wants to hear.

As if that weren't grim enough, investor sentiment is souring fast. The CBOE Volatility Index (VIX) is still flashing red, and profit-taking in the tech sector is exacerbating the broader market's woes. To make matters worse, rising bond yields are quietly stealing the spotlight from shares. 

Technically, the S&P 500 Index remains in the bearish camp in the short term. But today's session has offered a glimmer of hope: a much‑needed bounce from the local low of $7,224.2, following a string of heavy sell-offs. The Fibonacci grid shows SPX trying to stage a comeback to the 38.2% retracement ($7,375), but it is hitting a wall of resistance. To relieve pressure, buyers need to claw their way above this level and hold it. Failure to do so—and a break below $7,225—would be the market's method of saying the next leg down has already begun.

For those ready to take action, consider the trading plan down below:

Sell SPX from $7,320 to $7,340. Lock in profits at $7,200. Place Stop Loss at $7,400.

This forecast is valid from June 11 till June 18, 2026.