SPX: a blue-screen trauma

The major event during the previous week had nothing to do with financial markets, however, it led to a loss of investors confidence. Namely, an unfortunate situation occurred with an update of the Microsoft operating system, where many users were experiencing technical issues with the use of their computers based on the MS operating system. Considering that some of those users were governments, airplane companies, banks, payment systems, hospitals, to name a few, the western world had to stop for the moment on Friday on its historically largest IT outage. Engineers from Microsoft and CrowdStrike managed relatively swiftly to solve the issue, but the damage was done, and was reflected on the price of shares of both companies. MSFT went down from $455 to $432 traded on Friday.

For some time now there are more emerging discussions among analysts and economists whether the tech companies have reached their maximum potential at this economic round? There are also discussions whether it is time for investors to turn to small-cap companies, which have the biggest potential for growth in the environment of decreased interest rates. The S&P 500 reached another all time highest level during the previous week at the level of 5.667, however, at this point the index started its stronger correction, ending the week at the level of 5.505. A dip of 1.97% on a weekly level marked its worst performing week since April this year. As investors are weighing their next move and transfer of funds, some further increased volatility of the index is quite probable in the coming period.
Fundamental AnalysisS&P 500 (SPX500)Trend Analysis

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