S&P 500 Flirts With Record High as Trade Deal Smashes Resistance
Wall Street’s benchmark index surges past critical technical barrier—because nothing fuels rallies like politicians declaring victory.
Key drivers: Short-covering frenzy, algo buying triggers, and that sweet, sweet liquidity from central banks pretending they’re not monetizing debt.
Closing thought: When the VIX is this complacent, even the suits know it’s time to check the parachute harness.
Wall Street Opens Strong on Trade Breakthrough
U.S. stock markets kicked off the new week on a high note, reversing last week’s choppy price action driven by conflicting signals on trade policy and monetary direction. The S&P 500 gapped up at the open to 5,739.80 points and extended its gains throughout the session, closing with a robust 3.3% daily jump. This surge brought the index within 6% of its February highs—less than 300 points shy—signaling renewed investor confidence.
This sharp rally follows a recent plunge of over 20% in the S&P last month, triggered by fears of prolonged trade disputes and tightening Federal Reserve policy. However, sentiment turned quickly as diplomatic progress materialized.
Tariff Relief Spurs Risk Appetite
Over the weekend, the TRUMP administration announced a temporary 90-day suspension of most tariffs on Chinese goods. Under the new agreement, tariffs on U.S. imports from China were reduced to 30%, while exports to China now face only a 10% rate. The move sparked a risk-on reaction across financial markets, buoying not only stocks but also cryptocurrencies, which are particularly sensitive to shifts in global risk sentiment.
In addition to the S&P 500, the Dow Jones Industrial Average and Nasdaq Composite also saw notable gains. Commodity markets responded positively as well: crude oil prices climbed on expectations that reduced trade barriers WOULD stimulate global economic activity—and with it, energy demand.
Meanwhile, the U.S. dollar advanced against safe-haven currencies such as the Swiss franc, euro, and yen, as investors reallocated capital toward higher-yielding assets.
S&P 500 Chart Weekly – Opening Above the 50 SMA
From a technical perspective, the S&P500 has now re-entered its broader upward trend. After falling steeply from its February highs, the index consolidated through April and struggled to break above resistance at the 50-week simple moving average (SMA), a key technical ceiling. That moving average capped price gains last week, causing a temporary pause in the recovery.
Today’s breakout above the 50-week and 50-day SMAs adds credibility to the bullish outlook. A sustained MOVE above this zone could confirm the next leg higher, potentially aiming for a full retracement of the February drawdown.
