The S&P 500 hit a new all-time high after the US Consumer Price Index (CPI) report met expectations, leaving the September rate cut unchanged. Reports after the CPI showed that the expected Federal Reserve easing increased from 57 to 61 basis points, with many Fed members supporting a cut. Now, all eyes are on Fed Chair Powell’s speech at the Jackson Hole Symposium. He may either back his colleagues or emphasize that decisions will rely on thorough data analysis. The stock market enjoys the Fed’s supportive stance, which points towards growth unless the Fed changes its approach or negative economic events happen.

Technical Analysis Of S&P 500

On the daily chart, the S&P 500 is at record highs, boosted by Fear of Missing Out (FOMO). A pullback could happen, and the trendline provides a good risk-to-reward setup for buyers. If the trendline breaks, sellers may aim for a deeper decline. On the 4-hour chart, a minor trendline supports bullish momentum, and prices are just above a previous peak. Buyers want to strengthen these levels, while sellers are looking for a drop. For the 1-hour chart, the 6,460-6,475 support area is key. This area could attract buyers, while sellers eye a potential drop. Upcoming reports include the US Producer Price Index (PPI), Jobless Claims, Retail Sales, and Consumer Sentiment data. With the S&P 500 moving past 6,500, the trend seems upward. The US CPI report from August 12, 2025, showed 3.1%, which did not threaten the Fed’s supportive strategy. The market now anticipates 61 basis points of cuts by year-end, fully expecting the first cut in September.

Derivative Trading Strategies

For those trading derivatives, this environment favors bullish strategies. The CBOE Volatility Index (VIX) has dropped below 13, making long call options or bull call spreads on the S&P 500 more affordable for those looking to benefit from further gains. Traders should pay attention to the Jackson Hole Symposium later in August for any tone changes from Fed Chair Powell. There is strong consensus for a September rate cut, with the CME FedWatch Tool showing a probability over 90%. A major shock, such as a Non-Farm Payroll report showing over 300k jobs added, would be needed to challenge this outlook. Until then, small dips toward the 6,460-6,475 support area should be seen as good buying opportunities. However, it’s important to be mindful of risks. The sharp pullback in April 2025 reminded us how quickly market sentiment can change. A break below the minor trendline around 6,420 could indicate a deeper correction and trigger the purchase of protective puts. This strategy can protect against an unexpected shift from the Fed or negative economic news. In the coming days, traders should monitor the Producer Price Index tomorrow and Friday’s Retail Sales numbers for signs of economic slowdowns or rising inflation. Using weekly options can be a smart way to trade around these reports without committing to long-term positions. The goal is to follow the bullish trend while managing risk below established short-term support levels. Create your live VT Markets account and start trading now.

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