The S&P 500 extended gains as Treasury yields dropped after Fed Chair Powell struck a notably dovish tone. Powell highlighted unexpectedly strong growth and productivity gains powered by AI-driven investment and affluent household spending. However, the Fed faces a policy dilemma as tariffs and immigration restrictions heighten the risk of both inflation and unemployment. A “tug-of-war” between moderating inflation pressures and weakening labor conditions is complicated further by the ongoing government shutdown’s data blackout. Markets now price in a 25 bps cut in October and a potential follow-up in December. Meanwhile, China halted purchases of U.S. soybeans—which previously accounted for over 50% of exports—and shifted to Brazil and Argentina. Trump responded by threatening to ban Chinese cooking oil imports (1.27M tons in 2024), calling the boycott “an economically hostile act.”
Key Levels: Support at 6,598.0 | Resistance at 6,745.1
Investor Takeaway: RSI at 61 with sideways-up convergence and flat MACD buying pressures; dovish Powell tone offsets escalating agricultural trade tensions, keeping equities supported.