Muted CPI data for July has helped the S&P 500 index to hit new highs above 4400.
The S&P 500 index is currently up 0.23% after the Bureau of Labor Statistics reported a drop in the monthly headline CPI and core CPI numbers from 0.9% to 0.5% and from 0.9% to 0.3%, respectively. The consensus had been for consumer inflation to drop to 0.5% and 0.4%, respectively.
The inflation numbers add another round of confusion to the Fed’s tapering timetable, and investors believe that the latest inflation numbers could cause a tapering delay. This is why the S&P 500 index is climbing on the day.
The rise in the S&P 500 index is led by the financial stocks, which rose +0.66%% after getting support from rising US bond yields. Sliding oil prices continue to weigh on energy stocks, which are collectively down 0.16% as of writing.
Technical Outlook for S&P 500 Index
Price has cleared the 4422 resistance and touched off new highs at 4449. 4453 remains the initial upside target (100% Fibonacci extension), with 4561 serving as an additional upside target.
On the flip side, a decline from present levels retests 4422, with 4393 and 4368 lining up as additional price targets.