Invest in SPX up to $7,815

After briefly reaching a new all-time high near $7,800, the S&P 500 Index has taken a moderate step back. But beneath the surface, the fundamental picture is still bullish. Corporate earnings continue to impress, particularly those of AI-driven tech companies, which remain a key pillar of strength for SPX. Last week's upbeat forecasts from Microsoft, Amazon, and other heavyweights helped soothe jitters over whether the massive artificial intelligence spending spree will actually pay off. This is a positive sign for the months ahead. 

Adding fuel to the fire, expectations of further Federal Reserve (Fed) monetary tightening are fading fast. Last week's Producer Price Index (PPI) came in softer than anticipated, and US retail sales dipped in July—their first decline in nine months. This is yet another sign that consumer activity is cooling, thus reducing the odds of a September interest rate hike. However, the August 19 FOMC minutes struck a hawkish chord. Several committee members pushed for a 25-basis-point increase, and many left the door open to further tightening if inflation stays sticky.

And what about bonds? They have been a wildcard this week. A surge in 30‑year Treasury yields to their highest levels since 2007 triggered a sharp sell‑off in tech stocks and pushed the S&P 500 Index lower. The tide quickly turned, though, after Washington announced it would double its long-term bond repurchases. Yields tumbled, and SPX managed to claw back a significant portion of its losses.

On the technical front, the recent pullback has done a favor to bulls by unwinding the overbought conditions that had built up during the index's relentless climb. As things settle down, the next upside target seems to be a return to $7,815 —a level that corresponds to the SPX historic peaks. So, from a chart perspective, the path forward looks promising. 

The ultimate recommendation is to buy the S&P 500 Index at the current price ($7,720), aiming to reach $7,815 within two weeks. To keep risk in check in case the market moves against us, place a Stop Loss order at $7,675.