The S&P 500 ended higher on Wednesday after stronger-than-expected retail sales data offered evidence of resilience in the U.S. economy, but gains were capped as investors worried about more interest rate hikes by Federal Reserve in the months ahead.
A Commerce Department report showed retail sales surged 3% in January as purchases of motor vehicles and other goods pushed the number well past the 1.8% estimate from economists polled by Reuters.
On Tuesday, data showed U.S. consumer prices accelerated in January, boosting expectations that the Fed will raise the policy rate at least twice more this year to the 5-5.25% range.
“The good news from retail, and broadly from the stronger economy, has been mostly priced in,” said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky. “At the same time, that strength has taken market expectations of rate cuts off the table and moved the terminal Fed funds rate a little bit higher.”
Fuelled by a rebound in growth stocks that were hammered in last year’s stock market downturn, the S&P 500 (.SPX) has climbed 8% so far in 2023.
More than half of all S&P 500 companies have reported quarterly earnings, and nearly 70% of those have topped profit expectations, according to I/B/E/S data from Refinitiv. That compares to a long-term average of 66%.
Stock futures were little changed Thursday as traders assess retail sales data that pointed to a strong U.S. economy.
S&P 500 futures dipped 0.14%.
Earnings beat sent some shares higher – Roku surged 12% in premarket trading, Cisco added nearly 3% and Hasbro ticked 1% higher.
Wall Street is expecting further economic insight from a slew of reports Thursday. For starters, another inflation gauge will be out in the morning, the January producer price index.
S&P 500 TECHNICAL ANALYSIS
DAILY CHART:
S&P 500 is currently trading in the up channel.
S&P 500 is currently trading above SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting up trend.
S&P 500 immediate resistance is at 4167.15 & its immediate support level is 4145.59
HOW TO TRADE S&P 500 IN THIS WEEK
S&P 500 is trading in an up channel; it will continue to trade upside until any reversal so, remain bullish on it.
