Piper Sandler technical analysts reflected on the S&P 500 performance and outlook for the rest of the year in the aftermath of the FOMC meeting.
Following the decision not to raise interest rates at this week’s meeting, the U.S. stock market fell, while Treasury 10-year yields increased. The recent labor market data also supported the belief that the Federal Reserve is likely to maintain higher interest rates for a longer period than initially expected.
Analysts expect the stock market will trade in a “drop/chop” mode in the following weeks before the S&P 500 delivers a rally into year-end. They see the S&P 500 rallying all the way to 4,825.
“The weak September narrative continues playing out as expected, but long and intermediate-term uptrends remain intact. This is evidenced by 27% of SPX constituents above their 50-day MA, while 48% are above their 200-day MA,” analysts wrote in a report to clients.
“The SPX is back where it was four weeks ago along the 4,400 level, backing and filling within 6% of its YTD high (4,607) and support at the August ‘22 high (4,325).”
S&P 500 fell 1.6% yesterday, ending the day at 4,333. Based on analysts' projections, the S&P 500 could gain over 11% before the end of the year.