S&P 500 jumps to 6,654 as easing trade tensions fuel rebound

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S&P 500 jumps to 6,654

Highlights

- S&P 500 rises 1.56% to 6,654.71 after rebounding from 6,620 support.

- Trump’s softer stance on China sparks renewed investor optimism.

- Key resistance lies near 6,780, with support at 6,620 and 6,540.

The benchmark index bounced from a short-term demand zone near 6,620, supported by the 50-day exponential moving average (EMA) at 6,538.80 and a long-standing ascending channel. Monday’s rally pushed the index back toward its mid-channel resistance, signaling renewed buying strength after a week dominated by volatility. The 20-day EMA at 6,652.82 and 100-day EMA at 6,362.20 continue to underpin the broader trend, reflecting structural support for the ongoing uptrend that began in May.

S&P 500 price dynamics (Source: TradingView)

For momentum traders, the 6,680–6,700 range has become the critical pivot. A sustained breakout above this region would likely open the path to the upper boundary near 6,780 and potentially toward 6,900 later this quarter. On the downside, losing support at 6,620 could trigger a retracement to 6,540, with deeper risk extending to 6,360 if sentiment deteriorates. The relative strength index has climbed back to 52.48, showing balanced conditions after last week’s dip toward oversold territory.

Macro sentiment turns cautiously positive

Monday’s gains were driven by improving risk sentiment following Trump’s remarks that the United States “wants to help, not hurt” China. The shift in tone helped calm markets after last week’s 100% tariff threat wiped nearly $2 trillion from global equities. Megacap tech stocks led the recovery, with Tesla, Nvidia, and Broadcom each advancing sharply. Sector rotation also favored high-growth industries such as quantum computing, clean energy, and rare earths, reflecting renewed appetite for innovation-driven assets.

Analysts note that the rebound highlights the market’s readiness to buy into dips, provided geopolitical risks do not escalate. While trade uncertainty remains a headwind, investors are taking comfort in signs that U.S.-China negotiations have not completely broken down. The easing of safe-haven flows from gold and bonds further supports the case for a near-term stabilization in equity markets.

Outlook

The upcoming earnings season will determine whether the rally can extend. With major banks like JPMorgan and Goldman Sachs set to report in the coming days, investors will scrutinize credit conditions, loan performance, and consumer spending trends. Strong earnings could confirm the resilience of U.S. corporate fundamentals, paving the way for a move toward 6,780 and potentially 6,900.

Previously, we discussed how the S&P 500’s long-term uptrend remains underpinned by strong earnings expectations and robust liquidity despite intermittent geopolitical shocks. This week’s rebound reinforces that narrative. Unless tariff risks resurface or earnings disappoint, the index appears positioned for gradual recovery within its ascending structure.

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