📈 S&P 500 (SPX/USD) — Sharp Reversal Confirms Bearish Control
Key Highlights
- S&P 500 collapses into a -1.56% close after rising +1.9% intraday
- Fed cut odds fall below 40%, overpowering Nvidia’s blockbuster results
- AI stocks face deepening pressure as rate expectations shift
Market Overview
The S&P 500 suffered a major intraday reversal on Thursday, plunging to 6545.27 after an early-session rally evaporated under the weight of collapsing Fed cut expectations. Nvidia’s blowout earnings initially sent markets surging, but as the session progressed, traders quickly shifted focus to the harsher macro reality: Fed easing is no longer a near-term certainty.
Nvidia epitomized this reversal—up more than 5% early, but closing down 3%. Other AI leaders like AMD, Oracle, and Meta followed the same pattern, feeding into a broader unwind of the November AI rally. With Nvidia on track for an 11% monthly decline, the AI trade is experiencing its weakest month since March.
Yesterday’s stronger-than-expected NFP print (119k) drove December cut odds below 40%, sparking a reassessment of valuations across the tech-heavy indices. Growing concerns about AI return on investment—as firms commit to trillions in data center capex—are adding to the weight.
Walmart was a rare winner, rising 6% and signaling a potential rotation into defensives. But until rate expectations stabilize, tech remains vulnerable.
Today’s flash manufacturing & services PMIs, plus Michigan Consumer Sentiment, will shape the next move. Strong PMIs = pressure on equities; weak PMIs = potential bounce.
Technical Outlook (H4)
- Stochastic turning lower — bearish reversal confirmed
- Price well below 20-period MA — trend breakdown intact
- Failed rally attempt reinforces downward pressure
Key Levels (Updated 4H)
Current Price: 6545.27
| Resistance | Support |
|---|---|
| 6612.12 | 6485.58 |
| 6680.75 | 6423.39 |
Fremora Takeaway
SPX/USD is back in clear bearish territory.
A break below 6485 opens the door to 6423, and potentially the broader correction target around 6300.
Upside is capped unless the index reclaims 6612, then 6680.
Today’s PMI data will either reinforce the downside or offer short-term stabilization.
🛢 WTI Crude Oil (USO/USD) — Weak Demand Outlook Drives Fresh Breakdown
Key Highlights
- WTI drops to 58.72 despite shrinking inventories and Russian sanctions
- Market focus shifts to demand weakness and global oversupply
- Fed repricing (December odds <40%) weighs on growth expectations
Market Overview
Crude oil extended its decline to 58.72, breaking decisively below the $59 level as demand fears overshadowed supportive supply-side factors. Even after the EIA reported shrinking inventories and the US expanded sanctions on Russian oil, the market reaction was muted—underscoring how dominant the oversupply narrative remains.
The shift in the Fed’s outlook has played a major role. With rate cuts in doubt, markets are beginning to price in slower growth, translating into weaker energy demand. Combined with persistent agency forecasts (OPEC, IEA, EIA) pointing to multi-year supply surpluses through 2026, oil’s medium-term bias is firmly bearish.
Geopolitical tensions—from the Russia-Ukraine conflict to sporadic infrastructure attacks—continue to provide temporary support, but these effects have proven fleeting. Supply disruptions are quickly resolved, while demand concerns are structural.
Today’s flash PMIs across major economies will be crucial. Weak PMIs → stronger demand fears → more downside. Strong PMIs → short-term bounce, but may pressure Fed easing expectations.
Technical Outlook (H4)
- Stochastic sliding toward oversold — persistent bearish momentum
- Price below 20-period MA — breakdown confirmed
- Failure to reclaim 60.00 reinforces bearish continuation
Key Levels (Updated 4H)
Current Price: 58.72
| Resistance | Support |
|---|---|
| 59.50 | 58.13 |
| 60.06 | 57.57 |
Fremora Takeaway
WTI remains heavy and vulnerable.
A break below 58.13 targets 57.57, with potential extension toward the $56 area.
Upside requires reclaiming 59.50, then 60.06, but rallies are likely to be sold given overwhelming bearish fundamentals.
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Disclaimer
This analysis is for educational purposes only and does not constitute financial advice. Always trade responsibly.