S&P and Nasdaq turn more bullish after Waller's dovish remarks

Broader US stock indexes are pushing higher. What sparked the move? Dovish remarks from Federal Reserve Governor Christopher Waller.

Waller noted that inflation pressures appear to be easing, but he still intends to review next week's PPI and CPI data before the Fed's rate decision on September 16. His statements contributed to declining US yields and rising stock prices.

Why is this significant? Falling yields lower borrowing expenses, enhancing the appeal of stocks versus bonds. They also boost the present value of firms' future profits, especially affecting growth and tech shares. Although this link isn't always reliable, the markets today are adhering to that classic trend.

The broader indexes are spearheading the advance:

• S&P 500: Gained about 0.47%.

• Nasdaq Composite: Rose about 0.70%.

The news serves as a trigger. Price movements and technical indicators assist traders in determining their next actions.

Moving averages serve as useful references for bias and risk. When price is above a significant moving average, the bias turns bullish; below it, bearish. Trading between two key moving averages yields a neutral technical outlook.

Stated differently, a moving average does not ensure future direction. It provides a benchmark to assess if a trade is performing, and where to reassess if the price reverses.

• S&P 500: The day's rally lifted the index above its 100-hour moving average of 7695. The 200-hour moving average lies below at 7654, meaning the index now sits above both, strengthening the bullish case. The 7695 level now serves as the initial risk reference. Holding above it preserves the breakout; slipping back under would revert to a neutral stance between the two averages. A fall below 7654 would further undermine the technical setup.

• Nasdaq Composite: The index too broke above its 100-hour moving average at 26,301. The session high touched around 26,475, and the current price is near 26,400. The 26,301 mark gives buyers a close risk level. Holding above it confirms the bullish bias; the first upside target is today's high. Dipping back below the 100-hour moving average would weaken the breakout, pulling the bias back to neutral between the 100- and 200-hour moving averages.

The takeaway is straightforward: employ news for catalyst insight and technical levels for risk management. Buyers have acted. They now must defend the levels they cleared.