Weekly Stock Market Update & SPY Technical Analysis
Markets attempted a rebound last week as tariff concerns took a backseat and attention shifted toward monetary policy and interest rates. The Federal Reserve’s FOMC meeting sparked strong buying activity after policymakers decided to leave rates unchanged—an outcome widely expected by investors. Fed Chair Jerome Powell reaffirmed the central bank’s commitment to bringing inflation down to its 2% target, a battle that has persisted for over two years and remains a key market focus. The Fed emphasized that future rate decisions will be data-driven, making this week’s Personal Consumption Expenditures (PCE) Price Index a critical report, as it will provide the latest inflation reading for the U.S. economy.
Over the past 12 months, inflation—as measured by the PCE Index—improved from its March 2024 high of 2.8%, reaching a low of 2.1% in September. However, that progress reversed in October, climbing back to 2.5% in the most recent reading. The introduction of new tariffs is expected to add further pressure on import prices, creating uncertainty about their impact on inflation and consumer spending in the months ahead.
Beyond inflation, this week brings several key economic reports, including consumer confidence, consumer sentiment, and GDP data. The last consumer sentiment report showed a sharp decline, reaching its lowest level since July 2022—when inflation was at its peak. Consumers are growing increasingly cautious about the economy, directing their spending toward necessities. A recent Walmart report highlighted that lower- and middle-income shoppers are prioritizing essential goods, while even higher-income consumers are beginning to shop at discount retailers. These trends signal that Americans—who drive 70% of U.S. GDP—are feeling the strain of persistently high prices. This week’s GDP report is expected to show 2.3% growth, indicating a slowdown in economic expansion and adding fears of a possible recession this year.
SPY Technical Analysis:
SPY managed to avoid a sell-off last week, which was a positive sign for buyers, but it also failed to gain enough momentum to confirm that the downturn is over. The index remains near its critical $549.00–$552.00 support zone—if this level breaks, the market could see a sharp decline. For now, SPY may need time to consolidate and build confidence before attempting a recovery. A move above $571.00 would be necessary to regain bullish momentum and signal a stronger uptrend.