S&P500
A massive drop has been recorded in the US stock market. A correction is extending.
On Thursday, the main US stock indices fell sharply. A similar plunge took place on September 17. Overall, the US stock market plummeted twice in two weeks. Generally speaking, September has become the first bearish month since January 2021. For example, the S&P500 was traded at the June levels. On Thursday, the Dow lost 1.6%, the NASDAQ tumbled by 2.1%, and S&P500 nosedived by 1.2%.
Asian stock markets: Japan's indices fell by 2.1%, China's added 0.7% today.
Oil is stable amid the bearish stock market. Brent is trading above $78 per barrel on Friday. The energy crisis in Europe continues. Natural gas is trading at $1,180 per 1,000 cubic meters. Yesterday, it fell to $1,115 per 1,000 cubic meters. If the price remains high for a long time, it will seriously challenge the EU economy.
The S&P500 index is trading at 4,307 and is expected to be in the 4,270–4,340 range. Despite a major drop on Thursday, investors are reluctant to open new long positions. Although by the close of the market, it was the best time for trading because of the most attractive prices, unseen since the end of June. Anyway, the S&P500 closed at its lowest level and showed no signs of a rebound. Early on Friday, S&P500 futures were down by 0.5%.
The US government has decided to postpone a bill raising the debt limit along with a $1 trillion infrastructure plan. The bill has already gone to the Senate but is likely to be approved next week. Despite the importance of the debt ceiling issue, it was not the main reason behind the fall in the stock market. The plunge came because of a prolonged period of growth and the absence of a correction. Some experts have started to call the US stock market at these levels "the biggest bubble in history", predicting a crash and a new Great Depression. Investors are locking in profits. The US economy is steadily recovering. The market is expected to rebound in the coming days.
The US employment report logged a modest rise in jobless claims to 362K. At the same time, continuing claims fell to 2,800K from 2,840K in the previous week.
The key reports today are the PCE price index for August and the ISM manufacturing PMI for September.
USDX is at 94.27. It is expected to trade in the 94.00–94.50 range. The US dollar has not changed since yesterday amid strong fluctuations in the stock market. USDX is now staying at its year highs and is ready to continue rising
USD/CAD is trading at 1.2710. The price is likely to be in the 1.2600–1.2780 range. The pair has lost its bullish impulse.
