Basic overview
The S&P 500 rose to new highs today and erased all of March’s losses after Trump announced on Truth Social a two-sided ceasefire agreement for two weeks while the US and Iran negotiate a permanent peace deal. Discussions are scheduled to begin on Friday in Islamabad and may be extended if both parties agree.
As the escalation de-escalated, risk sentiment in the markets quickly turned and risky assets received significant bids. As expected, traders have returned to pricing in interest rate cuts by the Fed with an expectation of 14 basis points of easing by the end of the year compared to zero before the ceasefire announcement.
There remains a risk that the war could resume at any time because the United States and Iran have not officially ended hostilities. However, the bias has now turned to the upside for the S&P 500 given Iran’s acceptance of the ceasefire despite long opposing it. This is likely to keep the outlook positive for the negotiations.
It goes without saying that if negotiations fail and conflict resumes, the S&P 500 will quickly erase all gains and losses will likely extend to new lows.
Technical analysis of the S&P 500 – daily time frame
Standard & Poor’s 500 – daily
On the daily chart, we can see that the S&P 500 broke above the downtrend line and rose to new highs after Trump announced the ceasefire. If we get a pullback, we can expect buyers to intervene around the support level of 6765 with a specific risk below it to continue pushing towards a new all-time high. On the other hand, sellers will want to see the price break below the support level to come back and aim lower to the broken trend line.
S&P 500 Technical Analysis – 4 Hour Time Frame
Standard & Poor’s 500 – 4 hours
On the 4-hour chart, we have a bullish trend line that now identifies bullish momentum. If we get a pullback to the trend line, we can expect buyers to rely on it with specific risks underneath to continue pushing towards new highs. On the other hand, sellers will look for a break down to increase bearish bets to new lows.
S&P 500 Technical Analysis – 1 Hour Time Frame
Standard & Poor’s 500 – 1 hour
On the 1-hour chart, we can see that the price is currently trading above the upper border of the line Average daily range For today. In such cases, we can generally see some consolidation or pullback before the next move.
Upcoming stimuli
today We have the minutes of the FOMC meeting. Tomorrow we’ll get the US Personal Consumption Expenditures Price Index and the latest US unemployment claims numbers. On Friday, we close out the week with the release of the US CPI report and the University of Michigan Consumer Sentiment Survey. As a reminder, we also have the US-Iranian negotiations in Islamabad on Friday.
