The S&P 500 Index (SPX) is now dancing near an all-time high of 7,791.5, which was reached at the start of the previous week.
Yesterday, market participants were focused on the US inflation report. July’s Consumer Price Index (CPI) rose by 0.1% month-over-month, while the annual figure slowed from June’s 3.5% to 3.4%. The core readings came in at 0.2% and 2.5%, respectively. The data were closely aligned with traders’ projections and reduced the likelihood of a Federal Reserve’s (Fed) rate hike in September. According to the latest estimates, 62% of investors now anticipate that borrowing costs will remain unchanged. This is a positive catalyst for equities. Why? The answer is straightforward: lower Treasury yields cut financing costs and boost the appeal of the stock market.
The corporate sector and the ongoing earnings season provide additional fundamental support for the index. Around 85% of SPX-listed companies have already reported, beating market expectations. The aggregate earnings forecast for 2026 has just been raised from $350 to $365. Investments in artificial intelligence (AI), cloud computing, and data center infrastructure continue to be the primary drivers of this growth.
On the technical side, the S&P 500 looks capable of hitting new peaks and climbing toward 8,000. At the same time, momentum indicators suggest that overbought conditions are easing. The index entered this zone after last week’s 7% rally. With the less overheated market, the risk of a short-term pullback tends to diminish, opening the door to further upside.
The final recommendation:
— Buy SPX at the current price of 7,750, targeting 8,000 within one month.
— Place Stop Loss at 7,625 for better risk management if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
