S&P attempts a comeback amid positive CPI and PPI reports – S&P 500 forecast

[Redator]

US Indices are reacting interestingly to two major pieces of data that surprised positively when it comes to inflation, particularly after the NFP beat.

Markets shot up after the release of the Producer Price Index data but still not above yesterday's highs after a Risk-Off overnight session with starting to price in cuts more aggressively after the softer data.

Is the market starting to look at something else for the US?

Inflation data has surprised positively twice, with the Core PPI coming in at 3.0% vs 3.1% exp. and Core CPI coming in at 0.1% m/m vs 0.3% expected.

Just a reminder that the Federal Reserve prefers to track Core data to avoid more volatile energy and food prices before switching their policy stance.

To me, the market is looking at these few themes making US markets more anxious:

• US Jobless Claims above expectations for 3 upcoming weeks (Came in at 248K vs 240K exp. – Highest level since 2021) with particularly weak continuing claims
• A Federal Reserve that may start to be behind the curve when it comes to Employment and Inflation that is not materializing higher
• Rising tensions in the Middle-East with the Iran President saying they will continue to enrich uranium despite talks with US
• General distrust of Trump policies (nothing too new here) but particularly as it comes to the Big Bill

Bonds, Major currencies except for the USD and Gold (which just traded $3,400) are higher, Crypto stabilizing at higher levels, other global indices performing well – The fear seems to be there mostly for the US.

S&P 500 Technical Analysis

S&P Daily, forming Divergence

S&P 500 Daily Chart, June 12, 2025 – Source: TradingView

The recovery for US indices may have been too fast and too high as it left major Moving Averages lagging behind.

There has been a retracement back to the daily MA 200 in the end of May although it's currently standing 200 points lower – spot where markets may at least consolidate in the current state of affairs.

The MA 50 which usually doesn't stay too far is close to 400 points lower.

The Daily RSI is forming what resembles like a daily bearish divergence as the momentum fails to break higher in overbought territory.

It's too early to be bearish however as stocks have been up 25% since their April 2025 lows (4,814! lows on the S&P 500) and prices are almost 2% from their All-Time Highs.

Let's take a look at shorter timeframes.

S&P 4H Chart, bouncing on the 4H MA 50

S&P 500 4H Chart, June 12, 2025 – Source: TradingView

The 4H chart doesn't look as bearish with prices rebounding on the MA 50, in confluence with the immediate 5,990 pivot touched overnight and the rebound confirmed by the RSI bouncing from Neutral.

The overnight session hadn't been so rosy but bulls have started to make a change, it seems that the markets are re-interpreting the positive data - we will see if prices can reach yesterday's highs.

The intermediate resistance is between 6,070 to 6,090.
Any reversal will point towards the intermediate support at the 5,900 Zone.

S&P 1H, strong candles

S&P 500 1H Chart, June 12, 2025 – Source: TradingView

The PPI news was welcomed from bulls as they have pushed 3 bullish candles to undo yesterday's correction after the CPI.

Prices are just crossing the 61.8% fibonacci after already breaking the 1H MA 50 – Next hurdle ahead will be yesterday's 6,069 highs.

Look for more news with ongoing US tariff negotiations but it seems that the mood is getting better as we progress through the session.

Safe Trades!

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