Will S&P 500 index extend gains as momentum signals remain mixed?

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S&P 500 rises 1.37% to 7,479

Highlights

The S&P 500 posted its steepest single-session drop since April 2025, erasing about 3 trillion in market value on Thursday.
Friday saw the index recover 0.3 percent, as attention moves to fundamental reassessment and remaining Q3 2026 earnings announcements.
Technical analysis projects SPX to consolidate between 7,341 and 7,560 points, with indicators showing high downside probability and weak momentum support for a rebound.

Leveraged unwinding and chip losses trigger risk-off as earnings fade

On Thursday, the S&P 500 experienced its sharpest single-session decline since April 2025, erasing approximately $3 trillion in market value amid pronounced losses in chip stocks and causing a sweeping unwinding of leveraged positions. This wave of forced selling heightened volatility and prompted short-term risk aversion, but the index managed to rebound 0.3% on Friday, reflecting modest dip-buying interest, according to Benzinga. Meanwhile, with most S&P 500 constituents having already reported their Q3 2026 results, as compiled by FXStreet, the market's focus has shifted toward fundamental reassessment and remaining earnings disclosures.

Divergent signals as sell momentum clashes with neutral indicators

On the technical front, SPX is currently trading above the MA-20 but below the MA-50 on the hourly chart, while maintaining support over the MA-200. The Ichimoku Kijun level at 7,532 stands as immediate resistance. Momentum signals are mixed: both MACD and ADX point to a sell bias, yet RSI, Stochastic RSI, and CCI remain neutral, indicating a lack of short-term extremes. Bull/Bear Power is negative, suggesting seller dominance in intraday flows, and the Awesome Oscillator shows no clear trend alignment, reinforcing the divergence between price action and momentum.

Consolidation favored amid high downside risk and range-bound dynamics

In the short term, SPX is expected to trade within a 7,341–7,560 volatility band relative to current levels over the next 2–3 trading days. The probability of an upward breakout appears very low, while odds for a downward move are elevated. The baseline scenario calls for consolidation inside this corridor. Should SPX rise above 7,532, a move toward the upper end of the range or higher could follow, whereas a breach below 7,341 would confirm renewed downside momentum.

Viktoras Karapetjanc, expert at Traders Union, notes that the S&P 500 demonstrated impressive resilience after suffering a sharp, sentiment-driven drop and rapid unwinding of positions. He sees the swift rebound and the progress of Q3 2026 earnings season as positive signs for market stability. The analyst believes that near-term consolidation is likely, with upside momentum capped unless the index breaks above 7,532. "As long as fundamental signals remain firm and macro sentiment stabilizes, I expect the S&P 500 to defend its current range and set the stage for renewed advances in the coming weeks."

Earlier, analysts noted that technology's significant weighting in the S&P 500 continues to amplify the impact of swings in AI and chip-related shares on the broader index. The current setup reinforces those concerns, with technical signals now pointing to heightened short-term downside risk and a likely consolidation phase, making the 7,341 support level a critical threshold to monitor for renewed volatility.

Source of Data: SPX Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.