Selling SPX to 5700

At yesterday’s meeting, the Fed kept interest rates unchanged, but Jerome Powell anticipates "notable" inflation ahead as consumers face higher prices from the Trump administration’s planned import tariffs. Powell suggested that without the duties, a rate cut might have been warranted given recently favorable low inflation readings. However, he warned of an impending price shock as producers and retailers continue struggling to negotiate who will absorb costs from existing tariffs, while President Donald Trump considers a new aggressive set of import duties that could take effect as early as next month. 

The updated economic projections released alongside the Fed’s statement paint a stagflationary picture for the US economy: growth is expected to slow to 1.4% in 2025, unemployment to rise to 4.5%, while year-end inflation remains elevated at 3%, significantly above current levels.

Yesterday's American Labor Department report revealed mass layoffs last week, pushing jobless claims to an eight-month-high, as President Donald Trump's tariffs created a challenging business environment. 

The previous week's data was revised upward by 2,000 claims, resulting in this week's figure reaching its highest level since October.

Furthermore, the number of building permits for future construction in May dropped to a two-year low, as developers faced increased costs due to tariffs on materials including lumber, steel, and aluminum. A separate report from the Commerce Department’s Census Bureau revealed that permits for future single-family home construction in May decreased by 2.7% to a seasonally adjusted annual rate of 898,000 units, the lowest level since April 2023. The total number of construction permits fell by 2.0% to 1.393 million units, marking the lowest figure since June 2020.

Collectively, these factors are creating conditions for an S&P 500 correction.

The overall recommendation is to sell SPX.

Profits should be taken at the level of 5700. A Stop loss could be set at the level of 6100. 

The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.