It seems that ever since the master smashed the Space yesterday, the market has been developing in an interesting direction. The promised new high is gone, 72,000 is no longer sustainable, and in the end, even 71,000 couldn't be maintained. The ancient Greek god of short selling is not without reason.
To get back to the point, the main reason for the significant drop tonight is likely the PCE data. The core PCE in September rose by 2.7% year-on-year, unchanged from the previous value, and higher than the expected 2.6%. This marks the 41st consecutive month that the core PCE inflation rate has reached at least 2.5%, far exceeding the Federal Reserve's long-term target of 2%.
The core PCE month-on-month growth was 0.3%, the largest record in six months, and the previous value was revised up from 0.1% to 0.2%. As a result, the expectations for a rate cut in November have been further weakened. If there is a rate cut, it is basically 25 basis points, and there is even a possibility of pausing the rate cut.
The correction after the first attempt to break through the previous high is actually very normal. Although the bullish trend is temporarily hindered, after clearing out some liquidity from the long positions, it will quickly adjust to try to break through the previous high of 73,800 again, because even if the market is poor, it won't be difficult to break through that extra 100 points; it just needs to build momentum.
