Stock Market Rally
The S&P 500 is currently close to its all-time high, driven by a sustained rally in the stock markets. This development is supported by several factors:
Drivers of the Rally
Calm on the Trade Front: Recent developments in trade policy, particularly the temporary trade agreement between the U.S. and China, have improved market sentiment. This has alleviated concerns about a recession in the U.S. and led to a positive market reaction.
Strong Numbers from the Magnificent 7: The strong quarterly results from the leading technology companies, often referred to as the “Magnificent 7,” have bolstered investor confidence and contributed to price recovery.
Risks Beneath the Surface
Despite the positive developments, there are also risks lurking beneath the surface:
Technical Analysis: The S&P 500 is in a volatile sideways movement (trading range), constrained by the resistance zone around 6,149 points. Technical indicators suggest that the index may not exceed this resistance zone in the coming months.
Medium-Term Support Zone: The medium-term support zone is around 4,820 points. A break below this zone could lead to a strategic stop-loss at 4,750 points.
Forecasts for 2025: Goldman Sachs predicts a new all-time high of 6,500 points for the S&P 500 in 2025, which would represent an increase of approximately 11% from current levels. This forecast is based on the assumption that economic conditions remain favorable.
Conclusion
The S&P 500 is close to its all-time high, driven by positive developments in trade policy and strong quarterly results from leading companies. However, there are technical and fundamental risks that could jeopardize the ongoing rally. Thus, market sentiment remains tense, and investors should monitor for potential corrections.