S&P500 Forecast: SPX rises after in line inflation & Apple earnings

US futures

Dow future 0.28% at 45004

S&P futures 0.44% at 6097

Nasdaq futures 0.77% at 21663

In Europe

FTSE 0.43% at 8687

Dax 0.29% at 21793

US core PCE rose 0.2% MoM as expected
Trump warns of trade tariffs on Canada,
Apple rises after beating earnings & revenue forecasts
Oil falls across the week

Core PCE rises 0.2% MoM, 2.8% YoY

US stock markets are heading higher after the Fed's preferred gauge for inflation brought no nasty surprises and remained muted in December, supporting further reductions in interest rates.

The core PCE index rose 0.2% from November and 2.8% year on year. On a 3-month annualised basis, which is considered a more accurate picture, the core PCE gauged rose 2.2%, marking the smallest increase since July.

The data could help ease concerns about a revival in inflation after a period of acceleration in recent months.

The data comes after the US GDP was weaker than expected and following the Federal Reserve interest rate decision on Wednesday, in which Fed chair Jerome Powell said he needed to see more progress towards the 2% target before resuming rate cuts.

Elsewhere, the markets are taking Trump's trade tariffs in stride after threats that they could be applied as of tomorrow. Yesterday, President Trump said the US would impose 25% tariffs on imports from Mexico and Canada on February 1. He also warned that 10% trade tariffs could be added to China this weekend.

Despite this week's volatility, all three major indices are on track for monthly gains S&P 500 less than 1% away from its all-time high reached last week.

Corporate news

Apple has jumped 4% after a rise in service revenue overshadows weaker iPhone sales figures. Apple posted EPS of $2.40 ahead of the $2.35 estimated and revenue of $124.30 billion versus the $124.12 billion forecast. iPhone revenue was slightly below target at $69.14 billion, and services revenue was ahead of expectations at $26.34 billion. Apple said it expected growth in the March quarter of low to mid-single digits on an annual basis, surprising expectation and pointing to some momentum in demand.

Exxon Mobil is set to open modestly higher after the oil giant beat estimates for Q4 profits. Higher oil and gas production offset lower prices and weaker refining margins.

Chevron is set to open over 1.5% lower after the oil major posted weaker-than-expected Q4 income owing to softer US fuel demand and weaker margins.

S&P 500 forecast – technical analysis.

The S&P 500 is extending its recovery from Monday's low of 5915, pushing towards the record high of 6130 for each last week. The RSI above 50 and the price maintaining above the 50SMA keeps buyers optimistic about further gains. A rise above 6130 brings 6150 and 6200 into focus. The 50SMA offered support at 6000, also the psychological level, and below here, 59 15 comes into play.

FX markets – USD rises, EUR/USD falls

USD is rising and on track to gain 0.7% across the week, recovering from two weeks of declines. The dollar is supported by safe-haven flows following Trump's tariff announcements and the Federal Reserve's more hawkish stance at its policy meeting this week.

EUR/USD is falling after German inflation cooled more than expected, at -0.2% month-over-month in December, down from 0.5% in November. German retail sales also declined by -1.6% month-over-month in December. Data released yesterday indicated that the German economy contracted by 0.2% in the final quarter of last year. This data supports the view that the ECB will continue to cut rates in 2025.

USD/CAD hovers near a multi-year high after rising 0.9% this week. The loonie is under pressure due to expectations that Trump will impose trade tariffs on Canadian imports starting tomorrow.

Oil falls across the week

Oil prices are holding around $73 a barrel but are set to book declines of over 2% for the week after falling 4% in the previous week.

Oil prices are under pressure as Donald Trump is poised to follow through on his threat to impose tariffs on Mexico and Canada this weekend. These two countries are the largest crude oil exporters to the U.S., but it remains unclear if crude oil will be included in the tariffs.

Looking ahead, attention will also turn to the OPEC+ meeting scheduled for February 3rd, where the group will discuss Trump's plans to increase U.S. oil production and his demands on OPEC+ to increase output.

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