S&P 500, Nasdaq 100 – Talking Points
- S&P 500 finds support around 3,700; key fib resistance ahead
- Nasdaq 100 bounces sharply as gap fill becomes possibility near-term
- Fed Chair Powell delivers remarks on Capitol Hill
Equities continue to erase sharp overnight losses as Fed Chair Jerome Powell speaks on Capitol Hill on the state of monetary policy. In his preprepared remarks, Powell indicated that the American economy remains strong and also is positioned to absorb tighter monetary policy. The Chairman also stated that additional rate hikes remain appropriate, and the pace of said rate hikes will depend on incoming data and the everchanging economic outlook.
Risk has bounced sharply since Powell’s remarks began, as Treasury yields across the curve have come in sharply. The 2-year yield fell to 3.07% while the 10-year yield traded down to 3.14%. Market participants may look to the bid in bonds as a potential warning sign for this rally, given the precarious nature of risk in the current climate. Given the broader bear market context, it would appear that we remain in a “sell the rip” environment.
US Treasury Yields (Maturities Greater Than 1 Year)
Courtesy of TradingView
S&P 500 futures (ES) bounced sharply premarket from the 3700 zone, ultimately coming within touching distance of a key Fib level at 3800. 3802 represents the 61.8 retracement of the advance off the March lows to all-time highs back in January, and this level was a key downside target on the initial probe lower earlier this month. This area may prove to be key resistance for ES in the near-term, as risk faces a significant uphill battle to reclaim higher prices. Elevated inflation, tighter monetary policy and recession fears will continue to present significant challenges in the near-term. Should any tests