Last week, the S&P 500 Index (SPX) traded within the 7,300–7,400 flat range. What does this tell us? On the one hand, the asset did not stray far from historical highs; on the other, pressure from a massive sell-off in the tech and semiconductor sectors has recently become increasingly tangible. SPX is particularly sensitive to the performance of major IT companies, which have driven much of the index’s rally in the past few months.
The Federal Reserve’s (Fed) unclear monetary trajectory remains a key risk factor. The latest meeting convinced investors of the possibility that interest rates could stay elevated until the end of 2026. This scenario promises nothing good for equities. Higher borrowing costs tend to push Treasury yields to new peaks, stealing the spotlight from stocks, especially growth companies. Additional pressure may come from a reevaluation of the artificial intelligence (AI) segment. Tech giants have just experienced an active sell-off, triggered by market doubts about how quickly massive AI infrastructure investments will generate profits.
On the technical side, the S&P 500’s long-term outlook remains positive. However, after an impressive rally in recent months, the index appears to be taking a breather, moving within a flat trend. The nearest support zone sits at 7,250—a level from which SPX previously rebounded. This suggests that buying interest persists and the broader uptrend remains intact. One small drop of bitterness comes from the Moving Average Convergence / Divergence (MACD) indicator, which still swims in negative territory, signaling that bullish activity is temporarily sluggish.
The final recommendation:
— Sell SPX at the current price, aiming for 7,250 within a couple of weeks.
— Place Stop Loss at 7,450, just above resistance, to manage risks if the index moves in the opposite direction.
This content is for informational purposes only and is not intended to be investing advice.
