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SPX/USD — AI Fear Expands Beyond Tech

Key Highlights

• SPX drops as AI disruption fears spread across sectors
• Defensive rotation strengthens while growth cracks
• CPI could trigger either relief bounce or continuation selloff

Previous Session Overview

The S&P 500 sold off on Thursday and trades near 6840.64.

Market Outlook

The S&P 500 is trading around 6840, as AI anxiety broadens from “tech valuation” into “economic disruption.” The fear is no longer just about multiples—it’s about whether AI tools compress profit pools and eventually raise unemployment across industries.

Thursday’s selling wasn’t isolated:

• software names stayed under pressure,
• economically sensitive groups wobbled,
• and defensives outperformed as capital rotated toward perceived stability.

That kind of tape tends to produce sharp, mechanical selloffs: once narratives flip, positioning unwinds quickly, especially where leverage exists.

Friday CPI becomes the near-term catalyst. A soft print can produce a violent relief rally (rates down, risk up). A hot print risks extending the drawdown because it keeps financial conditions tighter while growth anxiety rises.

Technical Outlook (H4)

• Stochastic falling toward oversold
• Price below the 20-period moving average
• Strong bearish momentum, but bounce risk increases near support

Key Levels to Watch

• Current Price: 6840.64
• Resistance: 6881.97 | 6915.36
• Support: 6799.78 | 6764.67

Conclusion

SPX sits at 6840, and the chart remains bearish while below 6881–6915. Support at 6799.78 is the first line; a break exposes 6764.67. The narrative risk (AI disruption spreading across sectors) is now the primary headwind, with CPI acting as the short-term trigger that decides whether this becomes a relief bounce or a deeper continuation leg.

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USO/USD (WTI) — Premium Unwinds Fast

Key Highlights

• Oil sinks as markets price easing geopolitical risk
• IEA demand trim + inventory build reinforce bearish fundamentals
• Oversold conditions can trigger bounce, but trend is pressured

Previous Session Overview

WTI fell sharply and trades near 62.97.

Market Outlook

WTI is around $62.97, sliding as geopolitical premium drains out of the market. Headlines suggesting progress toward a deal have pushed traders to unwind escalation bets that previously supported crude above $65.

This move is reinforced by fundamentals:

• the IEA trimming demand expectations,
• ongoing surplus narrative for 2026,
• and that massive EIA inventory build (+8.53M) showing supply is not tight.

Add the broader equity selloff and growth anxiety, and crude faces a double headwind: less risk premium + demand concerns.

That said, oil is now trading like a market that can bounce sharply on any negative surprise (talks stall, new tensions) because positioning becomes one-sided quickly.

Technical Outlook (H4)

• Stochastic deep in oversold territory
• Price below the 20-period moving average
• Bearish momentum, but oversold suggests bounce risk

Key Levels to Watch

• Current Price: 62.97
• Resistance: 63.80 | 64.55
• Support: 61.95 | 61.21

Conclusion

WTI remains pressured at $62.97. Support sits at $61.95, then $61.21—levels that matter if bearish momentum persists. Upside recovery attempts face $63.80 first, then $64.55. Unless geopolitics re-escalates, crude is likely to trade heavier with rallies sold into resistance, because supply/demand data currently supports the bearish case.