Wall Street Rallies to Records on Tech Optimism; CPI Data, Global Risks Loom

Key Takeaways:

*S&P 500 hit a fresh all-time high, led by tech strength as Oracle surged 36% on upbeat earnings tied to AI optimism.

*Investors await today’s U.S. CPI print, which could shape Fed rate-cut expectations and determine near-term market momentum.

*Japanese political instability and escalating Russia-Ukraine tensions inject caution, tempering the bullish backdrop.

Market Summary: 

U.S. equities opened the week with broad-based gains, propelling the S&P 500 to a fresh all-time high, while the Dow Jones Industrial Average and Nasdaq Composite traded near record levels. The rally was fueled by robust performance in the technology sector, led by Oracle Corp., which surged 36% in a single session after reporting quarterly revenue of $15.9 billion, exceeding analyst expectations. The results bolstered sentiment toward artificial intelligence-related investments and reinforced confidence in tech earnings resilience.

Market momentum moderated in subsequent trading as investor attention turned to today’s release of the U.S. Consumer Price Index (CPI) data—a key input for the Federal Reserve’s policy outlook ahead of next week’s FOMC meeting. A softer inflation reading could strengthen expectations for aggressive rate cuts, potentially extending the equity rally, while a hotter print may temper recent gains and revive volatility.

Despite strong domestic sentiment, global uncertainties are adding layers of caution. Political stability in Japan came into question after Prime Minister Shigeru Ishiba announced his resignation, while escalating hostilities between Russia and Ukraine continued to fuel geopolitical risk premiums. These developments, combined with heightened sensitivity to inflation dynamics, may limit near-term upside momentum despite favorable technical and fundamental conditions stateside.

Traders are likely to remain selective ahead of the CPI release and the Fed’s September meeting, with broad market direction hinging on the interplay between monetary policy expectations and evolving international tensions.

Technical Analysis

Dow Jones, H4:

The Dow had previously been trading in a bullish trajectory, hovering near its all-time peak while forming a higher-low price pattern. That structure, however, was disrupted in the last session as the index slipped more than 0.5% and broke below its uptrend support line. Although the Dow has since staged a modest rebound, it is now testing a key resistance zone near its short-term liquidity level. A decisive break above this threshold would signal that bullish momentum remains intact, while failure to do so could open the door to a fresh round of correction.

Momentum indicators are also flashing warning signs. The RSI has slipped below the midline, while the MACD has crossed beneath the zero line, both pointing to a loss of bullish strength and signaling a potential shift in momentum for the index

Resistance Levels: 45,715.00, 45,970.00

Support Levels: 45,415.00, 45,220.00