Market Analysis: S&P 500 Reacts Positively to Declining Inflation

Yesterday's news showed that the consumer price index fell to 4.9%. The last time inflation was below 5% was in May 2021. Thus, the Fed has received new evidence of success in its fight against rising prices, and market participants now expect that a halt will be made in a series of interest rate hikes.

The stock index reacted positively. As a result of yesterday, the price of the E-mini S&P 500 futures increased, and this morning it is growing towards yesterday's highs.

The E-mini S&P 500 futures chart also shows that the contract value is near the important resistance level of 4,170.

According to analysts at UBS Bank, the price will be flat. And according to analysts at Morgan Stanley, US stocks will decline as there is a possibility of the economy plunging into recession and keeping Fed rates at a high level.

It is also unlikely that the unresolved problem with the US debt ceiling will contribute to optimism in the stock market. Therefore, level 4,170 may continue to provide resistance as it did before (shown by arrows).

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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.