Stock market: correction after strong rally on Wall Street?

Stock market: correction after strong rally on Wall Street?

According to a report from finanzmarktwelt.de, the rally on Wall Street has come to a standstill for the time being. Both the S&P 500 and the Nasdaq 100 have been trending sideways for a week. While the S&P 500 is currently up around 8.5%, the Nasdaq 100 is up just under 11%. However, some technical indicators point to a possible correction.

The upcoming economic data and the monetary policy of the US Federal Reserve Bank play an important role. PCE consumer spending price data, the central bank's preferred measure of inflation, could provide new clues about the Fed's next move. According to analysts' consensus estimates, the price increase in October is expected to slow to 3.5% after 3.7%.

From an analyst perspective, US yields and the dollar are expected to fall as the market believes the Fed has peaked interest rates. This will have an impact not only on the stock market, but also on bonds and gold.

With regard to the Nasdaq 100, it can be observed that a strong upward movement has led to a certain euphoria. The AAII sentiment shows a clear overhang of the bulls - a possible contrarian indicator. The index has also reached a significant resistance zone at the July high, meaning a directional decision is pending.

Analysts therefore expect possible corrections in the US stock markets, especially in the S&P 500 and Nasdaq 100. However, an exact forecast depends on further economic and inflation data as well as on the Fed's future monetary policy. Investors should therefore keep a close eye on developments in order to be able to react to possible changes in a timely manner.