FOMC Meeting Outcome Survey (September 17) – Source: FedWatch
Nick Eastham, Premium Client Manager at Spreadex, commented:
The market’s current optimism is built on a delicate assumption that inflation continues to ease just as the Fed delivers two rate cuts, while corporate earnings extend their nine-quarter streak of growth. It’s a neat story, but one that leaves little room for disappointment. With so much of the bullish outcome already priced in, any deviation from this script could trigger sharp moves.}
What stands out is the breadth of positioning. Investors are piling into equities, but they’re also buying bonds and gold. It’s rare to see such enthusiasm across both risk-on and risk-off assets at the same time. Far from signalling confidence, it hints at caution – an underlying anxiety that monetary easing could either fuel overheating or fall short of supporting the economy. That uncertainty is echoed in Spreadex’s own data, where just 47% of clients with open S&P positions are net long, underscoring how evenly split sentiment remains.
For the S&P 500, momentum still points higher, but it relies on perfect alignment: softer CPI data, timely Fed action, and continued earnings strength. The divergence among indices highlights just how finely balanced conditions are, yet it is precisely in these moments of tension that short-term trading opportunities often emerge.
The majority of analysts surveyed by FedWatch, 92% to be precise, believe that the first 25 basis points cut will be implemented during the next FOMC meeting on September 17. Meanwhile, more than 70% think that a second cut of the same magnitude will be executed in October.
On the earnings side, data from FactSet indicates that analysts expect a 7.5% year-on-year increase in corporate profits during the third quarter of this year. If that’s the case, this would be the ninth consecutive quarter of positive bottom-line performance for companies in the S&P 500 index.
Since the year started, this key stock market benchmark has booked a 10.8% gain while the Nasdaq 100 index and the Dow Jones Industrial Average have experienced a 13.5% and 7.6% increase respectively during this same period.
Let’s have a look at the latest hourly price action of these three stock market indexes to see where they may be headed as the third quarter is about to come to an end.
S&P 500 Index Finds Support at 6,475
The S&P 500 index bounced strongly off its early September lows of 6,360 and broke above the 6,475 resistance with enough strength to push through and make a new all-time high.