22.10.202606:52 Forex Analysis & Reviews: S&P 500 (SPX): Earnings season off to better-than-expected start

*see also: InstaSpot trading indicators for the S&P 500 (SPX)

S&P 500 futures are trading around 7,750 in the first half of the US session on Wednesday, holding on to a recovery after earlier weakness this week. The index is squeezed between hawkish Fed expectations and generally strong corporate results that are outweighing macro pressure for now.

Drivers behind today's move

The main driver of the current dynamics is the earnings season, which has started better than expected. On Tuesday, the S&P 500 closed up 0.28% at 7,712.57, with nine of 11 sectors finishing in the green. Health care and real estate led, while technology and communications lagged. On Wednesday, the index extended gains, opening near 7,736.43 after strong reports from Super Micro Computer and SpaceX, which revived appetite for AI-linked stocks.

Under the surface, tension remains. The 10-year Treasury yield sits near 5.12%, and the market prices in over a 90% chance of a December Fed rate hike. Brent crude remains around $109/bbl amid Strait of Hormuz tensions, supporting inflation expectations and limiting upside for equities.

Weak housing data on Tuesday (existing home sales plunged by 7.3% to record lows since 2001) briefly pushed yields down but did not change the overall narrative.

Technical picture

InstaSpot's composite technical analysis (on the daily chart) signals "Buy": 11 of 23 indicators favor buyers.

The index is consolidating after an early-October attempt to break above 7,835.

Key levels

Resistance: 7,795–7,835. Consolidation above this band would open the path to 8,000+.

Support: 7,735 (200-EMA on the 4-hour chart); 7,716 (200-EMA on the 1-hour chart); 7,700–7,690 (50-day MA and short-term support zone). A break below 7,650 would signal a deeper correction toward 7,500 and 7,470 (144-EMA on D1).

• Daily RSI is around 53, leaving room to move in either direction without overbought/oversold signals.
• OsMA remains slightly negative, but the histogram is contracting, hinting at waning bearish momentum.

Key events to watch

Wednesday, Oct. 21 — Meta reports after the close. As the first hyperscaler to report, its results will indicate whether companies are continuing to ramp AI capex. Strong outcomes would support the tech sector and the index, while disappointing results could trigger another wave of selling.

Thursday, Oct. 22 — the earnings parade continues. Tesla and other major names will determine whether the positive corporate impulse endures.

Tuesday–Wednesday, Oct. 27–28 — FOMC meeting. The market expects the regulator to keep its rate steady, but the tone of the statement and updated projections will determine whether the December hike probability stays elevated. A clear "pause" signal would relieve some pressure on valuations.

Strategy

This configuration does not favor aggressive buying at current levels. The index is trading in the middle of the 7,700–7,800 range, and risk/reward for longs is modest.

• Conservative: wait for consolidation above 7,840 (resumed uptrend signal) or a pullback into 7,650–7,600, where support looks more reliable. Entering in the middle of the range leaves little room to maneuver.
• Short-term trading: the 7,700–7,690 zone could support a bounce toward 7,795–7,800. Use a strict stop-loss order below 7,650. If the index fails to hold above 7,700 within one or two sessions, that itself signals weakness.
• Rule #1: do not buy just because "the market should recover." Earnings season can bring surprises, and the FOMC meeting next week is a binary risk. Without a confirmed breakout or a rebound off strong support, caution is the prudent stance.

This overview is based on public sources and media reports and reflects price dynamics driven by many factors; risk management and position control are essential.

See also our other notes:

USDX: market awaits Fed verdict and PCE data