SP500 Falls After US PPI Data

SP500 Falls After US PPI Data
US equity indices fell sharply after today's US PPI numbers, completely erasing today's 1% gains as traders expect the Fed to deliver another 75 bps rate hike in November.
As of writing, the SP500 index traded lower on the day, heading into the US trading session.

US PPI above expectations

The producer price index published by the Labor Department increased by 8.5% from January to September, which is slightly more than the predicted increase of 8.4%. The reading was still below August's 8.7% rise.

"It's stubborn and some people are hoping that we had peak inflation and it's going to come down quickly," said Joe Saluzzi, partner at Themis Trading in Chatham, New Jersey.

The latest monetary policy meeting minutes from the Federal Reserve will be released in the United States on Wednesday. Investors will be pondering authorities' comments on the effects of further tightening on the economy.

In the meanwhile, Thursday will see the release of the CPI inflation data, a crucial report before the FOMC's upcoming policy-setting meeting in November.

Nearing key support

It looks like the critical support, for now, stands in the 3,575 USD area, which has been held a couple of times already. If that level is broken to the downside, we might see further selling, likely bringing the index toward 3,500 USD quickly.

Alternatively, the price must climb above the short-term uptrend line, currently near 3,600 USD, to stabilize in the short term.
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