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The intraday market context across US equity indexes is currently showing a bullish bias. Last week’s volume profile is concentrated in the lower range, indicating potential short covering or new buying interest. Technically, this suggests watching for signs of absorption around current overnight lows, especially as ES already took out Friday’s lows.
 

On the macro side, signals remain conflicted. The rising probability of a September rate cut and the dovish forward curve are supportive factors. However, the hotter PPI print and elevated inflation expectations could shift the perception of rate cuts into a bearish catalyst—if seen as fueling further inflationary pressure. Much depends on investor interpretation.

A notable development was the divergence between contracts after the PPI release: while RTY maintained a downside auction consistent with the data, ES staged a surprise buying rotation, recovered sharply, and even printed a new record high. The bearish rotation in ES was effectively delayed to the next session, as prices corrected back upward on the day.

The revised NFP data also increased the odds of a rate cut, further supporting equities, while the PPI left uncertainty lingering over the Fed’s path and encouraged a more rotational market structure. Social media sentiment added another layer—traders reacted sharply to BTC’s drop, aligning with the inflationary concern from PPI. Many participants seemed unaware of the significance of the PPI release, leaning instead on technicals, which may help explain ES’s bullish reaction.

Looking at the higher time frame for ES, the contract remains in an imbalanced state above the quarter’s value area. Current macro inputs are again mixed: an uptick in SOFR leans bearish, while negative yields are supportive. A stronger dollar and higher volatility index add pressure, while weakness in Dr. Copper and strength in Gold reinforce caution.

In summary: the outlook is conflicted. Technicals continue to point toward bullish scenarios and potential buying opportunities, but macro headwinds suggest caution before any sustained continuation higher.

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