Where Next for the S&P 500?
With the S&P 500 tumbling 10% from its mid-February highs, we take a look at whether this correction is running out of steam—or just getting started. A weak bounce and a looming resistance zone suggest the index has work to do before the bulls can regain control.
Tariffs, Turmoil, and the End of ‘American Exceptionalism’?
For much of the past two years, U.S. stocks have outpaced global peers, fuelled by strong economic growth and corporate earnings. But that narrative is being rapidly unwound. Trump’s sweeping tariffs on imports from Mexico, Canada, and China have triggered fears of a slowdown, prompting Wall Street to question how long U.S. assets can maintain their edge.
The fallout has been brutal. The Federal Reserve has already downgraded its growth forecasts, citing tariffs as a key headwind. Meanwhile, a rare twin sell-off in both the U.S. dollar and equities suggests global investors are losing confidence in the ‘American exceptionalism’ trade. Add to that a sharp decline in major tech and healthcare stocks, and it’s no surprise the S&P 500 has struggled to find its footing.
A Weak Bounce, a Tough Road Ahead
After a sharp sell-off, the S&P 500 has started to consolidate, but there’s little sign of momentum shifting in favour of the bulls just yet. While the index has bounced from its March lows, price action remains sluggish, and a key resistance zone is emerging.
The 200-day simple moving average, the broken January swing lows, and the volume-weighted average price (VWAP) anchored to the trend highs all align to form a confluent resistance zone to keep a close eye on. Even if buyers can push prices higher, this confluence suggests they’ll need to overcome strong overhead pressure before any sustained recovery can take hold.
S&P500 Daily Candle Chart
Past performance is not a reliable indicator of future results
Short-Term Traders Eye the Range
On the hourly chart, last week’s price action has carved out a well-defined range, setting up a key battleground for short-term traders:
• A break above the range could see the S&P 500 challenge the resistance zone outlined on the daily chart.
• A break below would likely put the March lows back in play, potentially triggering another leg lower.
S&P 500 Hourly Candle Chart
Past performance is not a reliable indicator of future results
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