S&P 500 Price Stabilizes Above 6,000 – What’s Next?

Risk-On Mode Dominates Trading Landscape

Major U.S. stock indices advanced, with the VIX (a key gauge of market volatility and investor sentiment) falling to its lowest level in several months. An important driver of this positive momentum is optimism surrounding ongoing negotiations between the United States and China. These talks follow a truce declared nearly a month ago, which temporarily halted the imposition of new tariffs introduced in early April.

While no concrete details have emerged from the discussions, President Trump has expressed optimism about their progress. One of the United States’ main objectives is to secure the lifting of Chinese restrictions on exports of critical rare earth metals, which are vital for high-tech and defense industries.

Markets Brush Off Political Tensions

Financial markets largely shrugged off the protests in Los Angeles against the deportation of undocumented immigrants. Following nighttime clashes between demonstrators and police, the federal government deployed thousands of National Guard troops and approximately 700 U.S. Marines to restore order. However, the move sparked criticism from both California’s governor and the mayor of Los Angeles, as such deployments are typically made at the request of state authorities.

Tensions between President Trump and California’s leadership have continued to escalate, culminating in an exchange of threats, including the possibility of cancelling federal grants and a counter-threat from the governor involving stop sending billions in federal tax dollars. California remains a vital pillar of the U.S. economy, ranking as the fifth-largest economy globally, behind only the United States, China, Germany, and Japan.

S&P 500 Breaks Multi-Month Highs

On May 2, the S&P 500 index closed above its 50-day moving average, signaling the start of a bullish trend marked by higher highs and higher lows. By the end of last week, the index had surpassed the 6,000 handle for the first time.

Currently, the index is trading within a narrow trading zone between 6,000 and 6,200. A break above the April 19 high of 6,146 could pave the way for a test of the high end of this zone. A daily close above 6,200 would confirm strong bullish momentum and potentially open the door to further gains, possibly towards 6,400. Along the way, the psychological resistance at 6,300 should be considered.

Key Levels to Watch in a Bearish Scenario

A daily close below 6,000 could signal waning bullish momentum and hesitation among bulls, potentially inviting bearish pressure. In this case, the index’s price may correct lower toward 5,672. In this case, the support level of 5,786 should be closely watched.

S&P 500 price – Daily Chart

Chart Source: ADSS Platform