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Gold bounced off $4,400, holding the 200-day average. Conditions look more balanced than in March; a break lower opens the way to $4,000–4,100.

EUR/USD is still bounded in range of 1.1575/1660 and intraday bias remains neutral. On the upside, firm break of 1.1660 resistance will argue that fall from 1.1848 has completed as a correction at 1.1575. Intraday bias will be back on the upside for 1.1795 resistance first. On the downside, break of 1.1575 will solidify the […]

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After reaching a new all-time high, the US 500 index has started a correction, which may develop into a downtrend. The US 500 forecast for today is negative.

US 500 forecast: key takeaways

• Recent data: US CPI rose to 3.8% year-on-year in April
• Market impact: the data has a moderately negative effect on the US stock market

US 500 fundamental analysis

The increase in US annual inflation to 3.8%, above the forecast of 3.7% and the previous 3.3%, may have a moderately negative impact on the US 500 index. The data shows that inflationary pressures in the US economy are strengthening faster than expected, reducing the likelihood of imminent monetary easing by the Federal Reserve. For the stock market, this means investors may revise their interest rate expectations and price in a longer period of expensive financing. In such a situation, the US 500 index may face pressure, especially if market participants decide that the Federal Reserve will need to maintain a tighter stance for longer to contain inflation.

For the US stock market overall, this news is a restraining factor. Higher inflation reduces consumers’ real purchasing power, increases companies’ costs, and worsens expectations for future profits. In addition, rising inflation typically supports bond yields, making stocks less attractive than more conservative instruments.

US 500 technical analysis

The US 500 index maintains its upward momentum, but the probability of a reversal is increasing. The current correction may turn into a short-term downtrend. The resistance level has formed near 7,525.0, while the key support level lies around 7,345.0. If the trend reverses, the nearest downside target could be around 7,180.0.

The US 500 price forecast considers the following scenarios:

• Pessimistic US 500 forecast: a breakout below the 7,345.0 support level could send the index down to 7,180.0
• Optimistic US 500 forecast: a breakout above the 7,525.0 resistance level could drive the index to 7,625.0

Summary

Overall, the published data is a negative signal for the US 500 and the US stock market, as accelerating inflation increases uncertainty around the Federal Reserve’s future actions. If inflation continues to rise, investors may expect a more cautious policy stance from the regulator, which would limit the upside potential of US stocks, with technology, consumer, and real estate sectors remaining the most vulnerable, while defensive industries may appear more stable amid elevated inflation. From a technical analysis perspective, the US 500 index may fall to 7,180.0.

Open Account

The key event for XRP in May remains the fate of the CLARITY Act, which is expected to establish XRP’s status as a digital commodity at the federal level.

• US April non-farm payrolls +115K vs +62K expected
• Canada employment change -17.7K vs 15.0K estimate. Unemployment rate 6.9% vs 6.7% expected
• US and Iran could resume talks next week -- report
• ECB's Nagel: ECB will do whatever necessary to him he energy price surge
• Iran: From now on actions of the US maritime blockade will be met with military response
• Fed's Goolsbee: inflation has not been great. Job market is pretty much stable
• ECB's Legarde: Higher energy costs will push up input prices
• University of Michigan sentiment for May 48.2 versus 49.5 estimate

Markets:

• WTI crude oil down 7 cents to $94.76
• US 10-year yields down 3.2 bps to 4.36%
• Gold up $30 to $4716
• S&P 500 up 0.8%
• GBP leads, USD lags

The tech optimism is at a fever pitch as the Nasdaq climbed for the sixth straight week, adding 30% in that time and another 5% this week. Chip names continued to soar as Micron gained 15% and Intel 14% among others. The enthusiasm for AI is grossly overshadowing any worries about oil prices or rate hikes.

On oil prices, they finished the day flat after climbing earlier. A late WSJ report indicated progress on a 14-point one-page plan to lay out the parameters for a month of negotiations on nuclear, sanctions and other problems. The day started with US attacks on parts of Iran but Trump dismissed them as minor and that was enough for the rest of the market to forget it.

In terms of rate hikes, a second consecutive strong jobs report highlights how Kevin Warsh will have a tough time making the case for rate cuts this year. The ongoing boom in stock markets also adds to US consumer spending firepower. The lone dovish parts of the report were slightly softer than expected wage growth and another tick lower in labor force participation, which is down more than 1 percentage point since 2024.

The US dollar softened across the board but it was more about war optimism than the jobs report.

The Canadian dollar gained on USD but struggled elsewhere as April jobs were poor and included a further rise in the unemployment rate.

Have a great weekend.