S&P 500 futures
are holding steady around the 6,400 level this week, with the benchmark caught
between the potential for a standard correction toward 6,030–6,130 and the
possibility of a renewed upside reversal. The pivotal zone is in the
6,410–6,420 range. Last week, the SPDR S&P 500 ETF Trust (SPY) recorded net
outflows of $11.3 billion, a bearish indicator suggesting that institutional
investors may be preparing for a correction rather than anticipating a rally.
This move could be triggered by uncertainty over U.S.-China trade talks, as the
current truce expires on August 12 with no clear sign of an extension. Over the
weekend, Nvidia (NVDA) and AMD reached a deal with the U.S. government allowing
them to resume microchip exports to China in exchange for giving up 15% of
revenue from those sales to the federal budget. Semiconductors are a key
sticking point for Beijing in trade negotiations, while for Washington the main
issue was financial, which now appears resolved. The final political obstacle
is the Ukraine conflict, whose resolution would remove the justification for
Washington to impose secondary sanctions on China for importing Russian oil.
This could be addressed at the planned meeting between Russian President
Vladimir Putin and U.S. President Donald Trump during the Alaska summit on
Friday. European leaders have tried to join the summit but have little
influence after agreeing to an unfavourable trade deal with the U.S. Attention
is also turning to U.S. inflation data due Tuesday, with expectations for
headline CPI to rise to 2.8% year-on-year from 2.7%, and core CPI to accelerate
to 3.0% from 2.9%. If confirmed, this would bolster Federal Reserve Chair
Jerome Powell’s hawkish stance and could trigger a pullback in the S&P 500,
especially if the U.S. and China fail to extend their temporary trade
agreement. Thursday’s Producer Price Index release may offer early signals on
inflation, but by then the market narrative will be dominated by the Alaska
summit. Any progress toward resolving the Ukraine conflict would raise the odds
of extending the U.S.-China deal, which could lift the index, while a lack of
progress would likely push it lower.
Technically, the
S&P 500 remains in a bearish pattern, with a primary downside target of
6,030–6,130 and a valid sell signal at 6,230. Immediate resistance is at
6,370–6,390, and support at 6,270–6,290, with a break below opening the way to
the downside target.
In the oil market, the seasonally favourable period continues into September,
with Brent crude trading within its support zone of $66.00–$68.00 per barrel,
currently at $66.53. Weakness comes from OPEC+’s decision to boost production
by 548,000 barrels per day in September and expectations of possible sanctions
relief for Russia. Resistance lies at $76.00–$78.00, with deeper support at
$56.00–$58.00.
Gold remains
rangebound between support at $3,230–$3,250 and resistance at $3,430–$3,450,
finding balance around $3,330–$3,350, with the current level at $3,360. The
summer consolidation may end by mid-August, with a breakout from the range
likely thereafter.
In the currency market,
the U.S. Dollar continues to weaken, with EURUSD trading within its primary
target zone of 1.16500–1.17000 at 1.16570. A move above 1.17000 could drive
gains toward 1.19500–1.20500, though the heightened volatility increases the
risk of false breakouts and misleading moves.