US Weekly Report: Traders eye new record closing high for the S&P 500

Traders eye new record closing high for the S&P 500

The S&P 500 and Nasdaq are on track to approach new record closing highs this week, as inflation and growth scares (including recent US consumer price index (CPI), producer price index (PPI) and retail sales data) have been largely absorbed by the market. Attention has shifted to broader catalysts, such as the potential for Ukraine-Russia peace talks and delayed US tariff action. While this suggests that market volatility may be backloaded to Q2, where US trade findings that could still trigger reciprocal actions, investors are capitalising on near-term momentum to push for further gains. Surprisingly, despite US indices nearing record levels, sentiment indicators (such as the NAAIM Exposure Index, Fear & Greed, and AAII Investor Sentiment Survey) remain neutral, signalling room for sentiments to improve further.

Look-ahead: Federal Open Market Committee (FOMC) meeting minutes

At its January meeting, the US Federal Reserve (Fed) kept the Fed funds rate on hold at 4.25% - 4.5%, while signalling a cautious approach on future rate adjustments. The basis for the rate hold may stem from persistent inflationary pressures, while ongoing “solid” economic expansion allows policymakers to remain patient in easing. The upcoming Fed minutes are expected to reinforce the case for rates to be kept on hold for longer, validating market expectations for the next rate cut only in July. The recent upside surprise in US inflation data further supports this outlook.

S&P 500: Buyers eyeing for break to new record closing high

The S&P 500 has been trading within a narrow range in recent weeks, but a decisive move could be on the horizon, as buyers may target a fresh record closing high this week. Despite negative headlines—including DeepSeek, hotter inflation, weaker retail sales and US tariffs—the formation of higher lows signals buyers' intent to push higher. A likely breakout above the 6,125 level could open the door to the 6,420 level next, which aligns with a key Fibonacci extension level. Meanwhile, the daily relative strength index (RSI) has been well-defended above its midline, reinforcing the prevailing bullish bias.

Key levels:

• R2: 6,420
• R1: 6,125
• S1: 5,942
• S2: 5,700

US 500 Cash chart

Source: IG charts

Sector performance

Sector performance over the past week was mixed among the Magnificent Seven stocks. Nvidia (+6.9%) and Apple (+7.5%) led the technology sector to the top of the performance table, while Tesla lagged, falling 1.6% and weighing on the consumer discretionary sector. Despite negative headlines on higher US inflation data and weaker retail sales, market participants found reassurance in the underlying details, which still points to a broader trend of disinflation and a soft landing. Growth stocks have regained their shine over value in recent weeks, with the growth-value ratio on track to reach its highest level since January 2022. This has brought the S&P 500 within striking distance of a new record closing high, with market participants poised to watch for a breakout this week.

Source: Refinitiv

Source: Refinitiv

Source: Refinitiv
*Note: The data is from 11th – 17th February 2025.

Source: Refinitiv
*Note: The data is from 11th – 17th February 2025.

Source: Refinitiv
*Note: The data is from 11th – 17th February 2025.