Markets Brace for PCE, GDP as S&P 500 Tests Key Technical Levels

U.S. macro data will take centre stage today, with investors closely watching the release of December personal income and spending figures alongside the Federal Reserve’s preferred inflation gauge — the PCE price index.

In addition, markets will digest the preliminary estimate of fourth-quarter U.S. GDP. Our projection stands at 3.7% annualized growth, above the 2.8% consensus. Household income and consumption trends remain resilient, reinforcing the broader narrative of economic stability.

That backdrop continues to favour small-cap equities, which are typically more sensitive to domestic growth momentum.

Market Setup: Neutral Bias, Elevated Volatility

U.S. equity futures are trading modestly higher. The balance of risks appears neutral, though volatility may intensify as inflation and growth figures are released.

Upside momentum is being capped by geopolitical tensions in the Middle East and uncertainty surrounding a potential Supreme Court ruling on the legality of tariffs introduced by the White House.

Once again, investors are recalibrating expectations.

Technical Landscape: S&P 500 at a Crossroads

The S&P 500 remains positioned between its 50-day and 100-day moving averages, both acting as intermediate barriers.

• Resistance: 6,910 — a confirmed breakout above this level would reopen the path toward a bullish continuation scenario.
• Support: 6,800 — a sustained move below would increase corrective risks.

Futures on the S&P 500 and Nasdaq are consolidating. For the bullish case to remain intact, indices must hold above 6,800 (SPX) and 24,500 (NQ).

On the upside, 6,900 on the S&P and 25,000 on the Nasdaq remain key technical barriers.

What’s Driving the Market Today?

• Core PCE inflation data (December)
• Preliminary U.S. Q4 GDP
• S&P Global Services PMI (February)
• New home sales (December)
• Weekly jobless claims (slightly below expectations)

Oil prices are holding firm near $66 per barrel, supported by U.S. pressure on Iran over its nuclear programme and risks to supply through the Strait of Hormuz.

Sector Performance

Cyclicals: Mixed performance. Leaders: ITA, XLI. Laggards: XLF, XLY.

Growth sectors: Divergent trends. Leaders: MJ, XLC. Weakness: TAN, SOXX.

Defensives: Mostly negative. XLP underperformed, while XLU closed slightly higher.

Intermarket Signals

Oil: Trading within a short-term upward channel, testing the $66 level.

U.S. 10-year yield: Pulling back from the upper boundary of its corrective channel near 4.1%.

VIX: Holding within a local ascending channel but below the medium-term descending trendline from April.

Gold: Consolidating around the 5,000 level.

Macro releases today may determine whether equities break higher — or slip back into corrective territory.

Technical analysis by: Lucas Grant, Senior Technical Analyst at Finmire.