The S&P 500 (INDEXSP: INX) index caught some headwinds after the US announced its strong retail sales data. In my previous analysis, I mentioned the likelihood of the index facing strong resistance around the 4,550-4,650 region. This played out perfectly, as the price has now slid back under this region.
The S&P 500, a measure of the stock prices of the top 500 companies in the US stock market, continues to face bearish pressure. The benchmark index closed after sliding by 1.16% on Tuesday. The index is currently standing at 4437 points and may face more downside unless the bulls take over.
Strong Sale Data Puts More Rate Hikes On The Cards
On Tuesday, a 0.7% increase in retail sales was announced by the US, which was way more than the analysts’ prediction of 0.4%. This suggests a significant increase in consumer spending, which can lead to more rate hikes in the US. As a result, indices like Dow Jones, Nasdaq, and S&P500 fell by around 1% on average.
China also released its retail data on the same day. However, the data reported was weak, which also acted as a catalyst for the decline of the US stock markets. Another concerning thing for equity investors is the decline in housing prices in China for the first time this year. The central bank of China tried to counter the negative sentiment with a rate cut, but it did very little to calm the markets.
S&P 500 Index May Target 4,333 Soon
As I mentioned earlier, INDEXSP: INX has faced rejection from the key resistance region of 4,550-4,650. The benchmark index is already standing at its fresh monthly lows amid increasing selling pressure. There can be more downside in the coming days as the next support lies at 4,333 points.
For S&P 500 index forecast to remain bullish, the index must hold itself above 4,333 points. Before this level, there also seems to be some support at 4,389 points. If the bulls fail to hold this support, the index might further slide to a very strong support level of 4,333 points.
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