S&P 500 broad market index futures are
trading in positive territory near the 5,900 level this week, having shifted
from a downtrend into an uptrend and reaching their primary target at
5,940–6,040 points. Most of this upside move took place on Monday and Tuesday,
as traders responded to the delay of new 50% tariffs on EU imports until July
9. The index climbed to 5,927 points. While Wednesday’s release of the FOMC
minutes carried the expected hawkish tone, they also revealed rising concern
among central bankers about a potential uptick in unemployment. Policymakers
noted they might soon be forced to choose between lowering rates to support the
labor market or increasing them to curb inflation. For Fed Chair Jerome Powell, this type of
policy balancing is familiar territory, so markets would be not overly surprised.
Nvidia’s Q1 2025 earnings report added further
fuel to the rally, continuing the trend of robust results among major U.S. tech
companies. Meanwhile, markets received another jolt when the U.S. Court of
International Trade blocked Donald Trump’s proposed “Liberation Day” tariffs,
ruling that the president had overstepped his authority. Although the
administration promptly filed an appeal, the scope and duration of any tariffs
that may still come into effect remain unclear. The initial market response was
upbeat, with the S&P 500 jumping 1.4% to 5,997 on Thursday — the highest
since February 27 — and Nvidia shares surging 6.4% to $143.47. However, profit-taking
set in as legal and policy uncertainty resurfaced.
Also on Thursday, the U.S. released a slightly
revised Q1 GDP figure, adjusting the contraction to -0.2% QoQ from the previous
-0.3%. The revision was modest and had little impact on sentiment. Attention
now turns to the upcoming release of the Personal Consumption Expenditures
(PCE) price index, expected to show slowing inflation for April — a development
that could lend further support to U.S. equities. Still, all eyes remain on
legal developments to clarify the future of Trump’s tariff agenda.
Interestingly, large investors appeared to position defensively earlier in the
week. The SPDR S&P 500 ETF Trust (SPY) saw outflows of $4.51 billion on
Monday and Tuesday, suggesting that big players were hedging risk ahead of the
court’s surprise ruling.
The weekend may bring more news as the index
again approaches a technically critical level. With key macroeconomic data such
as PMI and Nonfarm Payrolls due next week — along with Jerome Powell’s speech
at the ECB meeting — caution is warranted. Until the S&P 500 breaks and
holds above 6,040 points, the chances of further upside or downside remain
evenly balanced. The technical outlook has turned bullish, with futures moving
from a downtrend into an uptrend and already reaching the initial 5,940–6,040
target. If the index settles above 6,040, an extended rally towards the extreme
upside target of 6,300–6,400 could be in play. Immediate support lies at
5,740–5,760.
Oil markets remain in a bearish technical phase.
Brent crude prices have declined from the $67.00–69.00 resistance zone to the
current $64.00 level. OPEC+ is expected to decide on potential production
increases for July at its meeting this Saturday, with rumors circulating about
a possible hike of 411,000 barrels per day. Immediate support remains at
$57.00–59.00, although over the medium term, the odds of a move towards
$75.00–77.00 remain elevated.
Gold prices, meanwhile, failed to maintain
traction above the $3,330–3,350 resistance area and retreated to the
$3,230–3,250 support zone. Currently trading near $3,320, gold is attempting a
rebound, but downside risks remain elevated. Continued uncertainty surrounding
tariffs could lend support to gold, though the baseline scenario still favors a
decline towards the $3,030–3,050 range.
In the currency markets, EURUSD experienced
wide swings. Following the court’s tariff ruling, the pair fell sharply by 1.3%
to 1.12090 on Thursday, only to rebound just as quickly to 1.13500. If the pair
manages to stabilize above this level, a path toward a fresh multi-year high —
above the November 2021 peak at 1.15730 — could become a realistic scenario.