Strong Economic Data Sparks Sell-Off in S&P 500

A batch of unexpectedly robust U.S. economic indicators prompted a wave of selling on Thursday, pulling the S&P 500 down by 0.5%. The benchmark index closed the session at 6,604.72, a decline of 33.25 points, as investors grew concerned that the strong data could delay interest rate cuts from the Federal Reserve.

Market Breadth Signals Widespread Caution

The session marked the third consecutive day of losses for the index, following a series of record highs earlier in the week. The negative sentiment was broad-based, with declining issues outnumbering advancers by a ratio of 3.11 to 1 on the NYSE and 3 to 1 on the Nasdaq. The heightened selling pressure was further evidenced by trading volume, which reached 19.58 billion shares, significantly exceeding the 20-day average.

Selective Gains Amid a Broad Decline

Despite the overall downward trend, several individual stocks posted substantial gains, driven by company-specific news.
* Intel surged as much as 9% amid speculation of a potential investment from Apple.
* IBM advanced over 5% following positive announcements related to its quantum computing collaboration with HSBC.
* Other notable performers included Albemarle (+5.80%), Synopsys (+3.03%), and Charles Schwab (+2.28%).

However, these gains were overshadowed by significant losses elsewhere.
* CarMax plummeted more than 20% after reporting disappointing quarterly results.
* Freeport-McMoRan declined nearly 17%.
* Major technology stocks continued to struggle, with Oracle falling 5.6% and Tesla dropping 4%.

Should investors sell immediately? Or is it worth buying S&P 500?

Technical Support Levels Come Into View

From a technical analysis perspective, the recent upward trend has been challenged. Although the index remains above its 50-day moving average of 6,446, key support levels at 6,611 and 6,506 are now in focus. A sustained break below 6,611 could pave the way for a test of 6,500 and potentially 6,460. While weekly and monthly RSI readings suggest underlying momentum is still intact, the daily Average Directional Index (ADX) indicates the current trend is losing strength—a view supported by the session’s volume analysis.

Macroeconomic Data Fuels Rate Concerns

The primary driver behind the investor retreat was a set of macroeconomic reports that painted a picture of a resilient U.S. economy.
* The second estimate for second-quarter GDP was revised upward to an annualized rate of 3.8%.
* Weekly initial jobless claims unexpectedly fell to 218,000.
* Orders for durable goods showed a recovery.

This strong data has led markets to question the likelihood of imminent Fed easing. In response, the yield on the benchmark 10-year U.S. Treasury note climbed to 4.18%. Simultaneously, the U.S. Dollar Index jumped 0.7% to a three-week high of 98.52, creating an additional headwind for equity valuations.

Attention now turns to Friday’s release of the August Core PCE Price Index, the Federal Reserve’s preferred inflation gauge. Any surprise deviation from forecasts could significantly amplify the current market anxiety surrounding the future path of interest rates.