Currently, the S&P 500 Index (SPX) is hovering near 7,700. Quotes appear to recover from the minor mid-September correction, once again approaching all-time highs.
The US stock market is now drawing strength from the reporting season. Analysts believe that the cumulative profit of the index’s companies for the third quarter (Q3) may increase by more than 30% year-over-year, with the technology and financial sectors leading the way. These segments look particularly robust and play an important role in SPX’s recovery. Once confirmed, high profit growth rates could boost investors’ confidence in the resilience of the US economy and support further gains in stock indices.
However, another factor warrants attention: the Federal Reserve (Fed) meeting on October 27–28. According to the latest Reuters poll, 94 out of 100 economists expect interest rates to remain in the 3.75%–4.00% range. A potential pause after the September hike could positively influence market sentiment, especially if the regulator does not signal the need for further monetary tightening. In this case, demand for US equities may strengthen.
The yield on 10-year American government bonds, which exceeds 5%, remains a key risk for SPX. Elevated borrowing costs limit the attractiveness of equities, while relentlessly rising oil prices intensify inflationary pressure. That said, strong corporate earnings can partially offset the negative impact of these factors.
From a technical standpoint, the S&P 500 is now holding above the critical 7,650 support level. The index is attempting to maintain its upward momentum, with the nearest target being the 7,845 resistance.
The final recommendation:
— Buy SPX at the current price of 7,700, aiming for 7,845 on a one-month horizon.
— If the market moves against us, place a Stop loss order at 7,650 to control risks.
This content is for informational purposes only and is not intended to be investing advice.
