S&P outlook ahead of US payrolls FridayUS 500 (per 1.0)TRADENATION:US500TradeNationRisk sentiment has weakened into the end of the week as investors digest the initial details of the Iran-Oman agreement to partially reopen the Strait of Hormuz. While the deal reduces the immediate risk of a complete closure, reported restrictions on US and Israeli vessels, alongside fresh reports of Iranian strikes on "hostile targets" near the Strait, have reignited geopolitical concerns and driven energy prices sharply higher. Brent crude rallied 3.8% yesterday to $82.49 per barrel and has extended gains by almost another 2% this morning, while European natural gas prices recorded their largest one-day increase in two months. Higher energy prices have revived inflation concerns, pushing Treasury yields higher and limiting appetite for equities. The S&P 500 slipped 0.18% on Thursday, with sector performance reflecting the move in commodities. Energy stocks outperformed as the only major sector to post gains, while industrials and materials came under pressure from higher input cost expectations. Despite the broader market weakness, technology remained relatively resilient, with semiconductor stocks continuing to attract buyers. Adding to the cautious tone, recent US economic data reinforced the view that the labour market remains resilient. Initial jobless claims unexpectedly fell below 200,000, Challenger job cuts dropped to their lowest level in two years, and second-quarter productivity significantly exceeded expectations. These releases, combined with reports that potential Fed Chair Kevin Warsh would be willing to raise interest rates if inflation remains elevated, have further reduced expectations of near-term policy easing. Today's focus now shifts squarely to the July US Non-Farm Payrolls report. Expectations are for payroll growth of around 65,000, below the recent trend but still indicative of a slowing rather than weakening labour market. The unemployment rate is expected to remain at 4.2%, although there is a possibility of a move to 4.3% if labour force participation rebounds. Conclusion The S&P 500 enters today's session caught between resilient economic fundamentals and rising geopolitical inflation risks. Elevated oil prices and higher bond yields are creating a more challenging backdrop for equities, while the Non-Farm Payrolls report has the potential to significantly alter interest rate expectations. Expect volatility around the data release, with bond yields and crude oil likely to remain the primary drivers of market direction. A weaker jobs report could support a rebound in equities, but sustained gains may prove difficult unless geopolitical tensions in the Strait of Hormuz begin to ease. Key Support and Resistance Levels Resistance Level 1: 7,790 Resistance Level 2: 7,840 Resistance Level 3: 7,890 Support Level 1: 7,650 Support Level 2: 7,613 Support Level 3: 7,570 The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. To the extent permitted by law, in no event shall Trade Nation (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk. Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Financial Spread Bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.