Market Extra: S&P 500 closes below a key bullish trend line for the first time since June, signaling bearish tilt

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The broad-market S&P 500 index closed below its short-term trend line for the first time since mid June, signaling that a bearish turn is taking hold of the U.S. stock market ahead of the policy-setting Federal Open Market Committee meeting next week.

The S&P 500 index
SPX,
-0.91%
closed on Friday down 0.9% at 4,432.99, ending beneath its 50-day moving average at 4,436.67, FactSet data show. That marks the first breach of that short-term line in the sand since June 18, according to Dow Jones Market Data.

Many technical analysts see the 50-day MA as a guide to the short- to intermediate-term trend, so a close below the line could portend further weakness.

Friday’s decline marked the second in a row for the S&P 500, led by a drop on the session in information technology
SP500.45,
-1.52%
and materials shares
SP500.15,
-2.06%,
wiping out the index’s weekly advance.

The S&P 500 ended the week off 0.6%, while the Dow Jones Industrial Average
DJIA,
-0.48%
and the Nasdaq Composite indexes
COMP,
-0.91%,
which both finished Friday lower, logged a weekly decline of 0.1% and 0.5%, respectively.