S&P 500 extends record run as Fed cut bets and tech strength fuel optimism

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S&P 500 holds record highs

Highlights

- S&P 500 closes at 6,587, up 0.85% on Thursday.

- Labor data lifts bets of a 50-bps Fed rate cut.

- Adobe and Super Micro gains bolster tech strength.

The S&P 500 index remains comfortably within its ascending channel that has guided price action since May. After bouncing from mid-channel support, the structure shows resilience, with the 20-day exponential moving average near 6,467 offering immediate protection.

The 50- and 100-day EMAs are stacked positively, and the Supertrend has flipped bullish, signaling that momentum remains intact. Unless the index breaks below 6,420, the near-term bias points higher, with scope for a move toward the upper channel band around 6,700.

Labor weakness drives Fed expectations

Macroeconomic drivers continue to tilt the balance toward easing. Weekly jobless claims jumped to 263,000, the highest since 2021, underscoring that prior tightening is weighing on employment. The August Consumer Price Index showed prices rising 0.4% month-on-month, slightly hotter than forecasts, yet the annual pace stayed at 2.9%.

That mix reinforced the view that inflation is steady enough to allow cuts. Markets are fully pricing a 25-basis-point reduction, with increasing probability of a larger 50-point move on September 17. Rate-sensitive sectors such as technology and real estate have already benefited from this dovish outlook, amplifying the S&P’s rally.

Earnings add momentum

Corporate results provided additional lift. Adobe rose 2.6% in after-hours trade on stronger-than-expected third-quarter numbers, reflecting robust enterprise software spending. Super Micro Computer jumped 4.1% after confirming shipments of Nvidia’s Blackwell Ultra systems, underlining persistent demand for AI infrastructure.

Still, consumer discretionary names showed fragility, with RH dropping nearly 7% on weaker revenue. The split highlights the divergence between growth sectors driving gains and pockets of pressure tied to consumer spending.

Outlook

The S&P 500’s resilience reflects a balance of technical strength and supportive macro expectations. A breakout above 6,600 would confirm continuation toward 6,700–6,750, while support at 6,420 provides a buffer on pullbacks. Much now hinges on the Fed’s September decision and whether the central bank validates market hopes for deeper cuts.

In prior analysis, we highlighted how the index’s climb has been shaped by both strong AI-driven earnings and easing policy bets. With inflation steady and employment data weakening further, the current rally reinforces that narrative, keeping the S&P positioned to extend gains into the final quarter.

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