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S&P 500 Index Inches Up at the Start of An Event-Packed New Week. Will it Hold?

s&p 500 Today

The S&P 500  Index was marginally up at the opening of markets on Monday, standing at 5114.78 points after gaining 0.27 per cent. Tesla stock started the day 12.47 per cent higher as it rode on news of a potential breakthrough in its attempt to get clearance for its Full Self-Driving (FSD) cars to operate in China. CEO Elon Musk was in China over the weekend, with his visit reportedly earning the company a breakthrough in data security negotiations with Chinese authorities.

However, the stocks of Microsoft (-1.30) and NVIDIA (-1.29%), were down at the opening of the new week, and this will limit the upside for the index.  Google was down by a much bigger percentage after shedding 2.44 percent of its value on the daily chart. Microsoft, the index’s largest constituent stock, reported forecast-beating fiscal third quarter earnings on Thursday, and that could provide momentum for a recovery. Meanwhile, Amazon’s stock price was up by a quarter of a percentage point at the time of writing, as investors positioned themselves for Tuesday’s release of earnings report for the first quarter of 2024.  Another key stock, Berkshire Hathaway, has its earnings report in the barrel and that, too could shape the S&P 500 Index trajectory in the next week.

META stock was down by 2.4% at the time of writing, reversing some of the gains made in the previous two trading sessions. The company’s impressive earnings figures released last week were counteracted by weaker-than-expected growth forecasts, limiting the stock’s upside. Looking ahead, the Federal Reserve is expected to announce its interest rate decision on Wednesday, and that, too, could bring new volatility into the market. 

While the Fed is largely expected to retain the rates at 5.25-5.50%, there’s room for surprise after the US economy grew slower-than-expected in the first quarter of the year. That has raised calls for the lowering of interest rates, as higher-for-longer could hurt the economy further.

Technical analysis

The momentum on S&P 500 Index signals that the markets are currently controlled by the buyers. The pivot point on the index is at 5081.56, and the upside is likely to continue if action stays above that level. That could support movement to go past the resistance at 5124.81, and potentially higher up to test 5168.06 in extension. Conversely, movement below 5081.56 will signal bearishness, with support likely to come at 5033.22. A continuation of the control by the sellers is likely to break the support and potentially push the index lower to 4998.87.