Morning Note: S&P 500 Reaches Record High Amid Trump’s Rate and Oil Policy Hints

S&P 500 Hits Record on Optimism Over Trump’s Comments

The S&P 500 reached an all-time high on Thursday as investors evaluated a mix of corporate earnings and absorbed comments from President Donald Trump, including his call for interest rate and oil price cuts. The S&P 500 rose by 0.5%, reaching 6,118.7, with all sectors closing higher, led by healthcare and industrials. Overall, the market remains optimistic as more details on Trump’s policies emerge, and this bullish sentiment reflects that optimism. Additionally, the Federal Reserve is expected to keep interest rates unchanged at its policy meeting next week.

(S&P 500 Daily Price Chart, Source: Markets.com)

From a technical analysis perspective, the S&P 500 index remains bullish, as indicated by the higher highs and higher lows within the ascending channel. It recently broke through the previous rectangular resistance zone, reaching an all-time high. With such significant bullish momentum, it is highly likely to continue its upward movement until the FOMC meeting.

Trump Criticises OPEC for High Oil Prices

President Donald Trump accused Saudi Arabia and OPEC of contributing to the war in Ukraine by keeping oil prices high. He claimed the conflict would end if they allowed global crude prices to drop. Russia, one of the world's largest oil exporters, relies on revenue from oil sales to fund its war efforts. Following Trump's remarks, crude oil futures declined, although markets remain cautious about his potential actions regarding the oil market.

(Crude Oil Futures Daily Price Chart, Source: Markets.com)

From a technical analysis perspective, the recent trend for crude oil is bearish, as indicated by the lower highs and lower lows within the descending channel. The price previously broke through the rectangular support zone, retested it, and was rejected again, driving the price further downward. This valid price action may lead to the price continuing downward to retest the support zone below.

Bank of Japan Raises Interest Rate by 25bps to 0.50%

At its two-day meeting ending Friday, the Bank of Japan (BOJ) raised its short-term policy rate from 0.25% to 0.5 %, marking the highest level in 17 years. In essence, this is another indicator of Japan's efforts to recover from years of deflation and stagnant economic growth. Moreover, the BOJ kept guidance on the future course of monetary policy unchanged, stating that it will continue to raise rates if its economic and inflation outlooks materialise.

(USD/JPY Daily Price Chart, Source: Markets.com)

From a technical analysis perspective, the overall trend of the USD/JPY currency pair remains bullish, as indicated by the higher highs and higher lows within the ascending channel. It broke through the previous rectangular support zone, retested it multiple times, but each attempt was rejected, indicating a lack of bullish momentum to reclaim this broken structure. Currently, the price is nearing the channel support. If it successfully breaks through this trend line downward, it may drive the price further downward.