The S&P 500 index took a breather this Thursday after posting new record highs on Wednesday. Thursday’s drop was primarily fuelled by the slight increase in the initial jobless claims and the rise in the US GDP, which did not meet the growth expectations of polled economists.
First-time applications for unemployment benefits rose from 349K to 353K in the week ended August 21, which was more than the markets expected (consensus: 345K). However, the central talking point was the US Preliminary GDP for the 2nd quarter of 2021, which rose from 6.5% to 6.6%. This figure did not meet the 6.7% growth that analysts had predicted, but the fact that there was any growth at all limited the intraday selloff on the S&P 500 index.
Also pressuring the index were comments attributed to Dallas Fed President Robert Kaplan in a CNBC interview, saying that the September FOMC meeting would be the time to announce plans for tapering, with an October start date.
The S&P 500 index is trading 0.46% lower on the day.
Technical Outlook for S&P 500 Index
The S&P 500 index has pulled back slightly following yesterday’s contact with the 4501 price level to form a new all-time high, t. It is now testing the 4480.90 support level. If this price level gives way, the smaller channel’s lower edge could first serve to resist this move at 4453.54 (100% Fibonacci extension), before 4422.92 and 4393.03 come into the picture as additional support targets. Also, note the dotted trendline support that crosses the 4368.58 support. This trendline may become relevant if the price dips below 4393.03.
On the other hand, bulls would be looking for a bounce on the 4480.90 price level to target the all-time high at 4501 and then break this level to form new highs that could run towards 4561.95 (127.2% Fibonacci extension). 4618.54 could become relevant in future if the index clears 4561.95