S&P 500: Growing Weakness Could Shake Global Equity Markets

A sudden jerk on June 16, with the monetary policy announcement that shakes the whole world of commodities, dollar, and equity markets to feel this jerk amid the growing dents of a pandemic since March 2020. Undoubtedly, the Federal Reserve shakes up the markets with a hawkish tone, with stocks and crude heading lower. While the coronavirus emerged in January 2020, the world of equity and commodities felt this jolt at its extreme on Mar. 23, 2020. Once again, global investors can feel this sudden jolt from June 16, 2021.

On Mar. 23, 2020, S&P 500, gold, silver, dollar, and crude oil futures experienced a sudden swing that shook the whole world while the fear of pandemic had so much prevalence among the investors as it has grown manifolds. Even though, half of the adult U.S. population has been vaccinated against the virus, allowing for broader economic re-engagement. But the pent-up demand unleashed by the resumption of business operations is straining the supply chain and fanning inflation pressures.

I find that this time this sudden jerk could have a denting impact on the global equity markets. Undoubtedly, the global equity markets would not experience the steep bounce that they found in April 2020. This downward move could witness some wobbling movements amid a downward trend, growing weakness in all the major equity indices of the United States could have a global impact.

Today, the S&P 500 futures have tested a high at 4221.38 and, currently trading at 4197.62 after 23 hours after the announcement of Fed’s minutes confirms the currently prevailing exhaustion.

Undoubtedly, the final directional move will get confirmation with this week’s closing. I find that a sustainable movement of the S&P 500 futures below 4141 will confirm the advent of a downward voyage that could be steeper ahead if the S&P does not hold above the 3769.

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