US 500 forecast: the index has entered a downtrend but is actively correcting

After breaking below support, the US 500 index rebounded by more than 2% and may break through resistance. The US 500 forecast for today is positive.

US 500 forecast: key takeaways

• Recent data: U.S. Initial Jobless Claims came in at 236K
• Market impact: the data is neutral for the equity market

US 500 fundamental analysis

The Composite PMI is a leading indicator of economic conditions. Readings above 50 indicate an expansion in economic activity, while readings below 50 signal contraction. The current PMI reading at 53.0 confirms that economic growth in the United States is continuing. However, the decline relative to both the consensus forecast (53.9) and the previous reading (54.2) points to a slowdown in growth momentum compared with market expectations.

For the US 500 index, the impact of such a PMI reading is typically mixed and largely depends on market expectations regarding interest rates and corporate earnings. When the indicator comes in below forecasts, it can exert moderate short-term pressure on the index, as investors reassess expectations for economic growth and company revenues.

US 500 technical analysis

The US 500 index has formed resistance at 6,910.0. Support at 6,725.0 has been broken. A correction in the index has resulted in a shift of the trend to the downside. The potential downside target is located near 6,630.0.

US 500 price forecast scenarios:

• Bearish scenario: if prices consolidate below the broken support at 6,725.0, the index may fall to 6,630.0
• Bullish scenario: if prices break above resistance at 6,910.0, the index may rise to 6,985.0

Summary

Overall, the PMI reading is not negative for the US 500, as it confirms ongoing economic growth. At the same time, it reflects a deterioration in momentum compared with the previous month and market expectations. In the short term, this typically creates a neutral or mildly restraining effect on the index, without signaling a risk of a sharp economic downturn. From a technical perspective, the US 500 index may decline toward 6,630.0.

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