What Happened
National Bank of Canada Senior Economist Jocelyn Paquet flagged that AI-related capital investment is running hot enough to keep US GDP growth above its long-run potential — forecasting 2.4% growth in 2026 and 2.0% in 2027. That above-trend growth makes it harder for the Federal Reserve to justify cutting interest rates, with markets now pricing in fewer cuts than previously expected.
Key Levels to Watch
The S&P 500 is currently trading near 5,460, with key support at 5,320 and 5,200. Resistance sits at 5,520 and the year-to-date high near 5,670. On the Nasdaq, support holds at 18,800 and 18,400, with resistance at 19,200 and 19,600. The ASX 200 finds support at 7,750 and 7,680, with resistance at 7,880 and 8,000.
Technical Picture
The S&P 500 remains in a medium-term uptrend, trading above its 50-day moving average near 5,380 and 200-day moving average near 5,160. RSI sits around 58 — not yet overbought but showing momentum. The Nasdaq mirrors this setup, with AI-heavy names like Nvidia (NVDA) holding above its 50-day MA at approximately $118. On the ASX, CSL and MQG are the names most sensitive to US rate expectations.
What Traders Are Watching
The key trigger level for the S&P 500 is a clean break above 5,520 — that would likely pull the ASX 200 toward 7,950–8,000. Conversely, a drop below 5,320 on the S&P 500 could drag the ASX back toward the 7,680 support zone. Watch Friday’s US non-farm payrolls and any Fed speaker commentary for near-term catalysts. Gold (XAU/USD) support sits at $2,310 — a break below this could signal risk-off rotation that hits ASX miners.
Bias
Neutral-to-Bullish. Above-trend US growth is a double-edged sword — good for earnings but bad for rate cuts. As long as the S&P 500 holds above 5,320, the path of least resistance remains upward, with AI stocks continuing to lead.