Geopolitics and inflation hint at bearish scenario for S&P 500

The S&P 500 Index (SPX) opened this week at 7,465. Over the past few days, a new wave of geopolitical tensions has been the key pressure factor: the US-Iran peace talks have recently taken a harsher tone, reigniting market concerns about free shipping through the Strait of Hormuz. As a result, investor behavior on June 22 is rather cautious.

Unfortunately, this is not all. The fundamental picture is also clouded by rising inflation worries, which traders initially brushed aside. The new Federal Reserve Chairman, Kevin Warsh, took a hawkish posture at the latest meeting, signaling his determination to tame stubborn consumer prices. Thus, interest rates are expected to remain higher for longer. This weighs heavily on equity multipliers.

Nevertheless, the stock market is firmly supported by steady interest in the technological and semiconductor sectors. Last week, these segments reached all-time highs thanks to news about partnerships in chip manufacturing and persistent demand for artificial intelligence (AI) infrastructure. However, it is worth noting that these positive factors are gradually giving way to the upcoming GDP report for the first quarter and the Core Personal Consumption Expenditures (PCE) index data—due on June 25. Inflation figures are likely to shape the Fed’s future policy path.

On the technical side, SPX is currently trading within a flat trend near 7,465. The red candle indicates that sellers are in control at the start of the day. Short-term sentiment remains neutral with a bearish bias. Prices have settled firmly below the 20-day middle Bollinger Band—the nearest resistance (7,492.2). The lower line (7,307.7) acts as solid support—a level from which the index has just rebounded. The On-Balance Volume (OBV) Indicator is now declining after its failed attempt at recovery, suggesting insufficient signs of a trend reversal and confirming consolidation within the current range.

Consider the following trading strategy:

Sell SPX at the current price, with Take profit at 7,370 and Stop loss at 7,550.

This forecast remains relevant between June 22 and June 29, 2026.