S&P 500 Hits 6M Low
The S&P 500 has closed the week at a six-month low, clearly a bearish signal. We’re now down about 7% from the all-time high, trading around 6506 points. The chart definitely isn’t looking as strong as it did just a few weeks ago.
The main driver behind this weakness is, of course, the recent conflict in Iran. Rising oil prices are likely to push inflation higher and weigh on the broader economy. As a consequence, we probably won’t see many rate cuts from the Fed this year, maybe one at best. Overall, the short-term outlook remains quite bearish.
Looking at the chart for support levels, there’s not much until around the 6100 area. That would imply another 7–8% downside from here, effectively turning the current pullback into a full correction. To be honest, that’s now my base case. Brace yourselves, there are probably more headwinds ahead.
What are your expectations for the coming weeks?
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