S&P 500 Analysis: Index Falls to Year-to-Date Low
As the S&P 500 chart (US SPX 500 mini on FXOpen) shows, the index dropped below the 6,570 level yesterday for the first time in 2026. As a result, the equity market may be on track to post a fourth consecutive weekly decline, closing below its 200-day moving average.
Why Are Equities Falling?Bearish sentiment is likely being driven by the ongoing military conflict in the Middle East:
→ Elevated oil prices are fuelling expectations of a renewed inflationary surge. This suggests the Federal Reserve will keep interest rates higher for longer (as reinforced by Powell?s remarks this week), putting pressure on both the economy and corporate performance.
→ Investors are also concerned that the United States could become drawn into a prolonged conflict with Iran, which may pose significant challenges for the country, despite efforts by officials to calm market sentiment.
According to Trading Economics:
→ US President Donald Trump stated that the US is not considering deploying ground troops to the Middle East;
→ Treasury Secretary Scott Bessent noted that the Iranian regime could face internal collapse;
→ Israeli Prime Minister Benjamin Netanyahu said Israel may refrain from further strikes on Iran?s energy infrastructure, suggesting the conflict could end sooner than expected.
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