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Market Update: S&P Level at $6,850 and Deteriorating Consumer Sentiment
The S&P 500 is currently trading just below a critical resistance level at $6,850. Analysts suggest that a break and close above this could lead to new all-time highs by Christmas, while failure to do so may result in a retest of November’s lows. Notably, the S&P closed below its 50-day moving average for the first time since April, ending a 198-day uptrend, the fifth-longest since 1950.
Consumer sentiment has seen a significant decline, with The Conference Board’s Consumer Confidence Index dropping from 95.5 to 88.7, nearing a 10-year low. The Present Situation Index fell from 131.2 to 126.9, while the Expectations Index decreased from 71.8 to 63.2. Additionally, serious delinquency rates for credit cards reached 7.1%, and student loan delinquencies surged to 14.3%, raising concerns about potential impacts on consumer spending.
In parallel news, Amazon announced a substantial investment of up to $50 billion to develop AI infrastructure for U.S. government agencies, igniting discussions around U.S. dominance in AI technology. Meanwhile, the probability of a Fed interest rate cut next month has increased significantly, now at 87.4%, fueled by recent shifts in economic signals and Fed communications.
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