Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
S&P 500 Falls from Record High Ahead of US CPI Data; PayPal Sinks on Weak Guidance

S&P 500 Falls from Record High Ahead of US CPI Data; PayPal Sinks on Weak Guidance

Diego Colman, Contributing Strategist
What's on this page


  • S&P 500 retreats from record levels as price fails to push higher and break through technical resistance
  • Profit-taking ahead of Wednesday's U.S. CPI data appears to be partially responsible for the pullback
  • Elsewhere, PayPal plunges more than 10% after mixed quarterly results and worse-than-expected profit guidance

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

Most read: Top 10 Candlestick Patterns to Trade the Markets

U.S. stocks took a breather on Tuesday and suffered moderate losses as traders became wary of the relentless rally in risk assets witnessed in recent weeks and began taking some profits on fears of a possible correction ahead of U.S. inflation data on Wednesday.

At the market close, the S&P 500 fell 0.35% to 4,685, ending an eight-day winning streak that has seen the index post its 64th record close of the year in the previous session. For its part, the Nasdaq 100 declined 0.77% to 16,210, weighed down by the sharp drop in Tesla and PayPal shares.

PayPal was one of the biggest laggards among mega-caps, tumbling more than 10% intraday after the company missed quarterly top-line forecasts and offered a lackluster outlook for both Q4 and 2022 due to supply chain issues, concerns about the economy and changing spending habits. On the latter point, the payments giant said revenue for next year will rise 18% on sales of $30 billion, notably below the 23% increase anticipated by Wall Street.

Equities Forecast
Equities Forecast
Recommended by Diego Colman
Get Your Free Equities Forecast
Get My Guide

With the earnings season winding down, investors' attention will turn to incoming economic data to gauge the strength of the recovery and assess the trend in consumer prices. In this regard, the U.S. CPI release on Wednesday will be a key data metric to monitor. October headline inflation is expected to spike 5.8% y/y, while the core indicatoris seen jumping 4.3% y/y, but traders should brace for an upside surprise amid persistent supply chain bottlenecks and elevated energy prices.

Higher-than-expected inflation figures can be detrimental for stocks, as they can dampen confidence and bring forward interest rate liftoff bets, despite the dovish rhetoric embraced by the Federal Reserve. The opposite is also true: lower-than-expected CPI numbersfor October can have a positive effect on investors’ mood and boost bullish sentiment, lifting risk-assets across the board.

US 500 Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 9% 3% 5%
Weekly -2% -7% -6%
What does it mean for price action?
Get My Guide


S&P 500 was rejected at resistance and pivoted lower on Tuesday amid fading bullish momentum in a context of overbought dynamics as reflected by the RSI oscillator (for reference, the benchmark has risen on 17 of the last 20 trading sessions, a clear sign of market exuberance and too much speculation).

If selling pressure picks up traction, the first technical support to consider appears near the midpoint of a short-term ascending channel at 4,600, but a move below this floor could trigger a pullback towards 4,550. On the flip side, if dip buyers resurface and take control of the market, cluster resistance stands near 4,720. If bulls manage to push price above this barrier, we would be in uncharted territory, but a possible upside target can be seen near the 4,800 psychological level.


S&P 500 (SPX) Chart by TradingView


  • Are you just getting started? Download the beginners’ guide for FX traders
  • Would you like to know more about your trading personality? Take the DailyFX quiz and find out
  • IG's client positioning data provides valuable information on market sentiment. Get your free guide on how to use this powerful trading indicator here.

--- Written by Diego Colman, Contributor

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.