The S&P 500 fell to its 50 moving average on the daily chart yesterday as investors were still concerned over reports of rising inflation. However, it erased the losses by the evening and closed the trading day in the green. The afternoon rise was caused by Fed chief Jerome Powell's testimony before the Senate Banking Committee.
Powell kept a dovish tone and tried to reassure investors that the US economy still needs some time to achieve its employment and inflation targets. With Powell having succeeded in convincing investors and the bulls still in power, the index could rise and test the previous record high of around 3958. Once it surpasses that level, it should rise just a bit to reach the psychologically important 4000 level. However, a further decline would test the 50 moving average one more time and continued weakness could send the index lower to the January low around 3,680.