The S&P 500's breakout from its July-September cup and handle pattern last week gave the benchmark stock index a positive background.

Bank of America strategists feel that holding the 5670–5615 area would "keep this breakout firmly in place with upside potential to 5930 and 6180," despite the fact that late September seasonality may be unpredictable.

The strength of the market's breadth from last week was also highlighted by BofA, as fresh highs in the advance-decline lines provide a positive indication for the main U.S. stock indexes.

This week, strategists highlight comparable good trends in cumulative net up volume, pointing out that the S&P 500 and NASDAQ continue to show positive volume "breadth" in this regard.

Due to investor enthusiasm for riskier assets following the Federal Reserve's first interest rate reduction in years, US stocks closed last week at a high point.

The three main indexes wrapped the week with gains. The S&P 500 increased 1.3%, taking its six-week winning streak to five, and raising its 2024 gain to about 20%. The Nasdaq increased by over 1.5%, while the Dow Jones increased by 1.6%.

The advances followed a larger-than-expected rate lowering of 50 basis points by the FOMC, its first since 2020.

Fed Chair Jerome Powell emphasised at the press conference that the rate drop does not portend any significant economic issues and expressed optimism over the future.

According to projections, the Fed's "dot plot" indicates a further 50 basis points of cuts by year's end and an additional 100 basis points in 2025.

Powell also reiterated that choices on future policy will be made meeting by meeting and based on facts.

(Sources: investing.com, reuters.com)