The S&P 500 gave back part of Thursday's gains after August payrolls smashed forecasts, reviving bets on a September Fed rate hike. Traders now turn to next week's CPI report as the next catalyst, with the index holding above a key support level.
The S&P 500 erased some of Thursday's gains on Friday after a stronger-than-expected August jobs report reignited rate-hike bets. The U.S. economy added 162,000 jobs last month, well above the 56,000 consensus estimate and the largest monthly gain in five months, while the unemployment rate held at 4.1%.
Rate-hike odds diverge across desks
The stronger payroll print pushed the odds for a September rate hike back to roughly 58%, according to InvestingLive. Separately, pricing tracked by Crypto Briefing showed the September odds at 48.5% and the October odds at 61.5%. Both the September 15-16 and October 27-28 Fed meetings are now in focus.
CPI now the key catalyst
Fed's Waller has said he won't consider a rate hike unless the data shows a hot CPI print. A soft or in-line reading would likely give the S&P 500 a boost, while an upside surprise in core monthly inflation would likely trigger a selloff on further hawkish repricing.
On the daily chart, the index bounced around the 7,640 support level and erased most of its prior pullback. A break lower would open the door toward the 7,400 trendline, while buyers holding the support could still position for a run at new record highs.
Sources: InvestingLive, Crypto Briefing
Trading involves risk.
Risk Disclaimer
