Purchasing SPX with 6,700 in sight

The S&P 500 Index (SPX) is currently trading near its six-month support zone (6,500).

The fundamental story, however, remains solid and continues to cushion the downside. The current corporate earnings season revealed average annual growth of 10%–15%, particularly in the technology and consumer sectors due to rapid advancements in artificial intelligence (AI) and cost-cutting measures. Recent US GDP data, along with household spending and labor market reports, point to a soft landing for the American economy, with no signs of a recession. Institutional capital inflows into equities, while moderating slightly, remain in positive territory. Of course, the Federal Reserve’s (Fed) elevated interest rates keep souring the mood, increasing borrowing costs and compressing valuation multiples. Still, the resilience of the index’s largest constituents and the absence of systemic stress in the banking sector provide a strong buffer against a deeper correction.

If current geopolitical tensions persist, SPX is likely to consolidate within the 6,500–6,700 range, with occasional attempts to test the channel’s upper boundary. But it’s worth mentioning that any meaningful step toward policy easing by the Fed or even a hint of de-escalation in the Middle East could flip the script in a heartbeat, sending the index back to the 7,000 level.

The final recommendation:

— Buy SPX at the current price, with a 6,700 target in mind over the next 1–2 months;

— Place a Stop Loss order at 6,450, just below support, to manage risk if the market moves against us.