S&P turns flat after bouncing off lows
The S&P 500, which ended Friday's session flat, has turned flat in today's session as well, after bouncing back from its earlier lows on reports that the US and Chinese leaders will meet to discuss trade after the two sides accused each other of violating their recent trade deal.
June could be a more challenging month for stocks if trade uncertainty persists, following what had been a strong May for global equities—marking their best monthly performance since November 2023. Much of that rally was driven by optimism that the worst of the US tariff threats had passed, encouraging investors to return to risk assets. However, any sense of calm was quickly disrupted after in the last few days, when Trump announced plans to double tariffs on steel and aluminum from 25% to 50%. This move has reignited concerns about a potential resurgence of trade tensions, adding to the already growing list of market risks. On top of that, investors are also bracing for political gridlock in Washington, as lawmakers prepare to negotiate a sweeping tax and spending bill amid escalating concerns about US government debt. With the debt ceiling deadline approaching, June could bring renewed market volatility, casting a cloud over the near-term S&P 500 outlook.
From a technical point of view, the trend is bullish but the doji candles in the last few trading sessions suggest that the momentum is waning and that a bit of a pullback could be on the cards.
Resistance at 5,900 was being tested at the time of writing. A daily close above this level would be a bullish outcome, in which case a run towards last week's high near 6,000 could be on the cards.
However, if resistance at 5,900 holds, then a potential drop to the next support area around 5787 would be the more likely outcome first. Further support is seen between 5,670 to 5,695.
By Fawad Razaqzada, market analyst with FOREX.com
