S&P 500 holds above key support as investors brace for jobs report

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S&P 500 steadies ahead of jobs report

Highlights

- S&P 500 trades at 6,643.71, holding above 20-day EMA support despite last week’s 0.31% decline.

- Stronger U.S. data dampened Fed cut bets, with yields above 4.15% weighing on equities.

- Jobs report will decide if index breaks 6,700 resistance or risks a retracement toward 6,450.

The S&P 500 remains inside an ascending channel that has guided the rally since early summer, with immediate support anchored at the 20-day EMA near 6,579. Deeper cushions sit at the 50-day EMA around 6,453, while the 100-day EMA at 6,280 marks a critical downside guardrail. The latest rebound from the 6,579 pivot suggests dip buyers are active, though the 6,700–6,720 resistance zone remains the ceiling to beat.

S&P 500 price dynamics (Source: TradingView)

Momentum signals lean constructive. The RSI is holding at 62.7, comfortably away from overbought levels, leaving scope for another push higher if resistance gives way. A sustained break above 6,700 would target the 6,800 handle, while a decisive failure below 6,450 would warn of a deeper retracement.

Macro drivers and sector rotation shape sentiment

The broader narrative remains tied to the Federal Reserve and economic data. Stronger-than-expected jobless claims and GDP revised to 3.8% underscored the economy’s resilience but also dampened hopes of aggressive Fed cuts. Treasury yields climbed above 4.15%, pressuring equities as investors recalibrated policy expectations.

At the same time, sector rotation has been evident. Nvidia’s landmark $100 billion partnership with OpenAI has fueled debate over whether the AI infrastructure boom is sustainable at current valuations, while defensive sectors have gained modest traction. The S&P 500 is still up nearly 3% for September, underscoring the market’s resilience even as valuations and Fed uncertainty cap further upside.

Outlook hinges on labor data

Friday’s nonfarm payrolls release is the next catalyst for direction. A strong labor print would reaffirm restrictive policy risks, potentially testing equity multiples, while softer data could revive hopes of easing and drive a breakout above 6,700. Until then, the index is likely to trade within the current range, with 6,450 and 6,700 serving as key inflection points.

Previously, we noted that the S&P 500’s ability to hold above 6,600 was critical to keeping momentum intact. That view remains valid: the index is consolidating near the upper boundary of its channel, with structural support levels still holding firm. The jobs data will now determine whether this consolidation resolves in a continuation higher or a broader retracement.

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