Market Analysis: S&P 500 Declines in August after 5 Consecutive Months of Gains


According to statistics over the past 25 years, the average growth of the S&P 500 index is 7.8% per year. But from the beginning of 2023 to August 1, the index rose by about 19%, so a noticeable correction in size was overdue.

The decline from August 1st to the month's low was about 2/3 of the previous rise — a perfectly acceptable proportion to blow off steam from the market, which was indicated by the RSI overbought in July (while forming a divergence pattern warning that the rally has exhausted ).

An important result of the summer was that analysts in the media began to mention the recession scenario less and less – market participants believe in a “soft landing” and that the Fed is controlling the situation with high inflation, given the alarming signals from the labor market.

What will happen in autumn? Traditionally, these are months of high volatility, with the S&P 500 having chances to try to hit a new high for the year after a correction that appears to have formed in August. This is indicated by bullish facts from the chart:

→ The price of the S&P 500 has found support at the lower boundary of the parallel channel.
→ The price rebounded from the support level of 4,340.
→ The price is above significant levels 4,388 and 4,465.
→ The price has broken the bearish trend line (shown in red).
→ The price may consolidate near the median line of the channel, where supply and demand may balance each other in total before the September Fed meeting.

Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Indices

European Stock Markets on All-Time Roll Despite Economic Bleakness Nvidia's Successes Helps S&P 500 Price Reach Its All-time High S&P 500 Inches Down After Long Rally as FOMC Minutes Approach NASDAQ Price Declining Ahead of NVDA Report News about US Inflation Shake Markets

Latest articles


Brent Crude Oil Makes Sudden Rally As OPEC Countries Mull Low Output

Crude oil is a particularly unusual substance in that it is one of the only consumable commodities that institutions and private individuals widely trade across the spectrum of global markets, and it is a staple component as an energy resource

Forex Analysis

Australian Dollar Weakens amid Inflation News

According to data published today by the Australian Bureau of Statistics, the Consumer Price Index (CPI) value was: actual 3.4%, expected = 3.6%, a month ago = 3.4%, 2 months ago = 4.3%. Data shows Australia's consumer price growth


AAPL Share Price Rises Nearly 1% after Scrapping Electric Vehicle Plans

In 2021, the release of an electric car from Apple was expected in 2025, in 2022, the deadline was shifted to 2026. As it became known yesterday from Bloomberg and WSJ, Apple decided to completely abandon the project. Causes for

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.