US 500 forecast: the index extends gains and hits new all-time highs

After reaching another all-time high, the US 500 index is showing signs of a short-term correction in its uptrend. The US 500 forecast for today is positive.

US 500 forecast: key takeaways

• Recent data: US services PMI came in at 51.3 in April
• Market impact: the data is positive for the stock market

US 500 fundamental analysis

The US services PMI came in at 51.3, above expectations of 50.5 and the previous reading of 49.8. Since the index moved back above the 50-point threshold, this signals the services sector has returned to expansion after the prior weak reading. Investor sentiment is also being influenced by the progress of US-Iran talks, which have not yet provided clear signals that the conflict is coming to an end.

For the US 500 index, this release can be viewed as moderately positive overall, as the services sector represents a large share of the US economy and is directly tied to consumer demand, employment, corporate earnings, and overall business resilience. A stronger PMI could signal that the economy retains the ability to grow despite high interest rates and consumer caution.

US 500 technical analysis

The uptrend in the US 500 remains intact, although there are signs of a correction. The 7,155.0 resistance level has been broken, while the key support level has formed around 7,055.0. If the advance resumes, the next upside target could be 7,290.0.

The US 500 price forecast considers the following scenarios:

• Pessimistic US 500 forecast: a breakout below the 7,055.0 support level could push the index down to 6,855.0
• Optimistic US 500 forecast: if the price consolidates above the breached resistance level at 7,155.0, the index could climb to 7,290.0

Summary

Overall, the services PMI release at 51.3 is a positive signal for the US 500, as it indicates improving economic activity and reduces fears of a sharp economic slowdown. The main support for the market may come from expectations of more resilient corporate earnings. However, the final reaction will depend on which factor investors consider more important: a stronger economy or the risk of a prolonged period of high interest rates. From a technical perspective, the US 500 index could rise towards 7,290.0.

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