The S&P 500 Index (SPX) gained nearly 3.5% last week—its most impressive performance over the past six months. Such a surge finally put an end to a five-week losing streak.
Friday’s US labor market report, which investors had eagerly awaited, showed solid job growth and a notable decline in the unemployment rate. March saw 178,000 new nonfarm jobs added—well above the expected 65,000. Unemployment fell from 4.4% to 4.3%. These strong figures allayed fears of a potential US recession, provided support for the dollar, and dashed any market hopes for a Federal Reserve (Fed) rate cut this year. On the flip side, resilient data reinforced expectations of further corporate earnings growth and underpinned consumer demand, backing the SPX’s recovery.
The first quarter (Q1) 2026 reporting season kicks off next week, with positive sentiment buoying the S&P 500’s rally. Analysts are forecasting a 13.2% year-on-year increase—an outcome that would mark the sixth consecutive quarter of double-digit earnings per share (EPS) growth. The technology and artificial intelligence (AI) sectors are projected to be the primary engines behind these spectacular results. Demand for data centers and chips remains elevated, pushing segment earnings to sky-high levels. Even with margins potentially squeezed by surging energy prices, strong domestic consumption and ongoing corporate investment should drive widespread beats on both revenue and profit expectations—a dynamic that has historically triggered an April rally in the stock market.
The final recommendation:
— Buy SPX upon breaching 6,600, targeting 6,760 within the next couple of weeks;
— Place a Stop Loss order at 6,550, slightly below the support level, to mitigate risks if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
