S&P 500 hit a fresh record high on Monday before easing. Other than Thursday, when it recorded a loss, the index has been hitting all-time highs consistently for a week now.
As noted by LPL Financial’s chief market strategist, Ryan Detrick, S&P 500 has not recorded a pullback exceeding 5% since the start of 2021. He has further indicated that the index has recorded 53 new record highs year-to-date. Prior to that, only 1964 and 1995 recorded over 50 fresh highs.
The recent surge has been boosted by Fed’s dovish stance on Friday and the subsequent shift by investors on economic growth. The jitters surrounding the US monetary policy, which resulted in S&P 500 recording a loss on Thursday, were eased by Powell’s disassociation of tapering from rate hikes.
Subsequently, investors have shifted their focus to the high-growth technology stocks. Considering that the value of these financial assets depends largely on their future earnings, a low interest rate environment is a bullish catalyst for the index.
On Monday, Apple Inc hit its all-time high of $153.45 after rising by over 3%. Google also surged to a record high of 2,922.40 while Amazon was up by 2.15% at $3,421.57.
S&P 500 technical outlook
S&P 500 has eased after hitting a new record high of 4,536.24 on Monday. At the time of writing, the index was up by 0.43% at 4,528.80. Since the beginning of August, it has surged by about 3.11%. Besides, it is up by about 23.51% since the beginning of the year.
In the near term, it will likely pull back to Monday’s low of 4,511.64 before bouncing back towards the bulls’ next target at 4,550. A move below the support level of 4,473.61, which is along the 25-day EMA will invalidate this thesis.