S&P 500 index price struggles to break 5,400 as weak momentum clashes with fading trade optimism
S&P 500 nears key resistance zone as sentiment cools despite improving macro backdrop
U.S. stock futures were muted on Thursday following a strong two-day rally driven by renewed optimism over U.S.-China trade talks and fading concerns over Federal Reserve independence. The S&P 500 climbed 1.67% recently, while the Nasdaq surged 2.5%, reflecting investor relief after President Trump clarified that steep tariffs on Chinese goods may be reduced and reiterated his support for Fed Chair Jerome Powell.
However, gains were tempered after Treasury Secretary Scott Bessent clarified that no unilateral tariff cuts were proposed and that trade talks have yet to officially begin. The resulting ambiguity capped momentum across major indices. IBM shares also weighed on sentiment, falling nearly 7% in after-hours trading after the tech giant reaffirmed its 2025 guidance, disappointing hopes for an upward revision.
S&P 500 index forecast (November 2024 - April 2025) Source: TradingView.
Technical pressure builds near resistance as bullish momentum wanes
The S&P 500 remains within a medium-term downtrend despite the recent rebound. Technical charts show the index consolidating near 5,375, just below key resistance at 5,421.30, which aligns with the 50 EMA and upper Bollinger Band on the 4-hour chart. A sustained move above this zone could open the path toward 5,485 and the descending trendline near 5,570. However, failure to clear this range risks a pullback to the 20 EMA at 5,311.87 or deeper toward the 5,272.42 support.
Momentum indicators paint a mixed picture. The RSI on the 4-hour chart stands at 52.60, suggesting neutral sentiment, while the MACD histogram has just turned positive. The Awesome Oscillator remains slightly in negative territory, reflecting limited conviction despite the recent upmove.
Outlook hinges on trade talks and earnings clarity
Markets are now awaiting fresh catalysts. Any formal initiation of U.S.-China trade negotiations or dovish Fed commentary could provide the fuel for a breakout. Conversely, if macro or earnings disappoint, bears may regain control below the 5,272.42 zone.
In earlier sessions, we noted how the S&P 500 was trapped between softening momentum and heavy resistance zones. This latest test of 5,375 affirms the importance of directional confirmation before betting on trend continuation.
