Piper Sandler technical analysts reviewed the S&P 500’s recent performance and outlook for the remainder of the year following the FOMC meeting.
After the decision to keep interest rates unchanged at this week’s meeting, the U.S. stock market saw a decline, while Treasury 10-year yields increased. Recent labor market data also supported the belief that the Federal Reserve is likely to maintain higher interest rates for a more extended period than initially anticipated.
Analysts anticipate that in the coming weeks, the stock market will trade with some fluctuations before the S&P 500 experiences a rally toward the end of the year. They project that the S&P 500 could reach as high as 4,825.
“The weak September narrative continues as expected, but long and intermediate-term uptrends remain intact. This is reflected in 27% of SPX constituents being above their 50-day moving average, while 48% are above their 200-day moving average,” analysts noted in a report to clients.
“The SPX is back around the 4,400 level, which it occupied four weeks ago, and it remains within 6% of its year-to-date high (4,607) with support at the August ’22 high (4,325).” The S&P 500 declined by 1.6% on the previous day, closing at 4,333. Based on analysts’ projections, the S&P 500 could potentially see an increase of more than 11% before the end of this year.