Piece written by Alexa Smith, Trive Financial Market Analyst 

The S&P 500 Futures (CME: ES) experienced a modest uptick, bolstered by the release of data indicating a rise in consumer prices during August. This data solidified market expectations that the Federal Reserve would maintain its current interest rates throughout September. Headline inflation rose by 0.5% in August, urging past forecasts, while core inflation slipped from 4.7% in July to 4.3% in August. 

The rise in headline inflation was underscored by the peak in gasoline prices, which have been rallying due to further supply cuts from OPEC+ members. With PPI MoM, Retail Sales and Initial Jobless Claims all expected to be released from the US today, the S&P 500 might not want to discount the chance of a rate hike just yet.  

Technical 

After a descending channel pattern took the S&P 500 Futures towards a 2-month low, strong economic data bolstered the index futures into a firm uptrend. A swing-low breached the 100-day moving average before falling short of the 4430.25 resistance at the Golden Ratio. However, the index futures gapped up due to resilient macroeconomic data in the US, which boosted the chance of a pause from the Fed. 

Since supply and demand are in equilibrium, the focus remains on key data expected today. If the data further supports a pause from the Fed, the index futures could retest the 4540.50 resistance, which could mark a pivot point for an uptrend as the price action has been unable to breach this level.  

However, the data expected today could fall short of expectations and encourage a pullback towards the 50-day moving average line. If the price action breaches the 50-day moving average line, the 4486.25 support at the 100-day moving average may mark a pivot point for a downtrend.   

Summary 

The S&P 500 Futures surged after inflation data boosted the chance of a pause from the Fed in the next policy meeting. If the upward momentum ensues, the index futures may attempt to retest the 4540.50 resistance. However, macroeconomic data today could tip the scales in favour of a hike. In this case, the index futures could attempt a retracement towards the 50-day moving average line. 

Sources: TradingView, Reuters