- Futures Rise After Market Decline
U.S. stock futures are trading higher this Monday following last week’s market dip, driven by mixed signals from the August jobs report. Investors are speculating about the Federal Reserve’s upcoming interest rate decision. As of 03:28 ET (07:28 GMT), Dow futures gained 188 points (0.5%), S&P 500 futures rose 29 points (0.5%), and Nasdaq 100 futures jumped by 137 points (0.7%).
Last Friday, Wall Street’s major indexes closed lower due to concerns over a slowing labor market. Both the S&P 500 and Dow Jones posted their largest weekly drops since March 2023, while the Nasdaq Composite saw its sharpest decline since January 2022. Broadcom (NASDAQ: AVGO) led semiconductor stocks lower, falling 10.4% after missing revenue expectations for the fourth quarter.
- Focus on Fed Rate Cut Speculation
Investor sentiment on a potential Federal Reserve rate cut is divided. According to CME Group’s FedWatch Tool, there’s a 73% chance of a 25-basis point cut, while the odds of a larger 50-basis point cut have dropped to 27% after an initial post-jobs report spike. Analysts are uncertain about the Fed’s move, though some suggest a 50-basis point cut is possible to address labor market weakness, with inflation fears easing. Fed Governor Christopher Waller hinted that rate cuts are likely, but the pace and extent remain undecided. - Boeing Nears Tentative Union Deal
Boeing has tentatively reached a deal with its largest union, potentially averting a major strike. The proposed four-year agreement includes a 25% pay increase, enhanced retirement benefits, and a commitment to build a new aircraft in the Pacific Northwest. Union leaders are urging members to accept the deal, but a rejection could lead to a strike starting at midnight on Friday. Boeing’s new CEO, Kelly Ortberg, is under pressure to stabilize the company after recent safety issues. - Couche-Tard Pursues Seven & i After Rejected Bid
Despite an initial rejection, Canada’s Alimentation Couche-Tard remains committed to acquiring Seven & i Holdings, the parent company of 7-Eleven. The $38.5 billion takeover bid was turned down by Seven & i’s board, which called it ill-timed and raised antitrust concerns. Couche-Tard is optimistic about future negotiations and believes a deal can benefit both companies. - Oil Prices Rise Amid Hurricane Threat
Oil prices are rising as traders monitor a potential hurricane in the U.S. Gulf Coast, a key area for refining capacity. By 03:29 ET, Brent crude was up 1.6% to $72.17 per barrel, and U.S. crude futures (WTI) climbed 1.6% to $68.78 per barrel. The prospect of lower interest rates is also helping to support crude prices, as a rate cut could boost economic activity and oil demand.
SPY/SPX Weekly Breakdown & Levels to Watch
Last week, we highlighted the key level of 5665 as the critical resistance point, noting that if sellers continued to defend this area, prices could retest the daily pivot near 5600, then drop to 5585. We saw the index break beyond these downside targets, with a significant weekly move nearly doubling the average range. The index bottomed at 5394, creating a perfect setup to execute our live stream short plan, which resulted in a 600%+ gain.
As we look ahead, the key focus is on whether sellers can maintain momentum and drive the index lower. With a prominent lower high on both the daily and weekly charts, all eyes are on the 5435 level this week. This level is significant, representing not just a technical area but also marking a 5% correction from recent highs. Acceptance below this point could open the door to further downside targets at 5400, 5330, and 5275, where the Year-to-Date Volume Point of Control (YTD VPOC) sits.
On the upside, a successful reclaim of 5435 could lead to a test of 5485, with 5565 as the next major resistance level, which was the prior daily breakdown point.
Quick Reference Levels:
- Upside Targets: 5435, 5485, 5565
- Downside Targets: 5400, 5330, 5275
Key Economic Data This Week:
- Wednesday: CPI
- Thursday: PPI
- Friday: Michigan Consumer Sentiment
Stay tuned for live updates and analysis throughout the week from OptionsPlayers. See you in chat
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