What Happened
Chicago Federal Reserve President Austan Goolsbee stated the US has “an inflation problem” after April’s Consumer Price Index (CPI) came in worse than expected. The hawkish tone crushed hopes for near-term rate cuts, sending the S&P 500 down approximately 0.6% to 5,202 and the Nasdaq falling 0.7% to 16,195. The ASX 200 dropped 0.8% to 7,748 in sympathy, dragged lower by rate-sensitive financials and growth stocks.
Key Levels
- S&P 500 Support: 5,150 (recent consolidation floor) and 5,011 (April swing low)
- S&P 500 Resistance: 5,265 (prior all-time high zone) and 5,320 (March peak)
- ASX 200 Support: 7,700 (psychological level) and 7,620 (50-day moving average)
- ASX 200 Resistance: 7,820 (last week’s high) and 7,910 (all-time high region)
Technical Picture
The S&P 500 remains in a short-term uptrend off April lows but is showing signs of fatigue below the 5,265 resistance zone. The RSI on the S&P 500 sits near 58 โ not overbought, but momentum is fading. The ASX 200 is trading below its 20-day moving average (7,790), which is a near-term bearish signal. Gold (XAU/USD) caught a bid, rising 0.9% to $2,365/oz, as inflation fears typically support the precious metal. Iron Ore slipped 1.1% to $117.40/tonne on global growth uncertainty.
What Traders Are Watching
- A break below ASX 200 7,700 could accelerate selling toward 7,620
- S&P 500 holding above 5,150 is critical โ a close below signals a trend reversal
- CBA and NAB are under pressure; watch CBA at the $118.50 support level
- Gold above $2,400 would confirm a bullish breakout and attract momentum buyers
Bias
Bearish (short-term). Goolsbee’s comments reduce the probability of a 2024 rate cut, which is negative for equities and growth assets. Until inflation data improves, the path of least resistance is lower for both the ASX and US markets.