The S&P 500 has delivered a strong performance in recent weeks, supported by easing inflationary pressures, improving expectations for Federal Reserve monetary policy, and solid US corporate earnings, particularly in the technology sector.

Recent inflation and labor market data have reinforced expectations that the Fed may adopt a less restrictive policy stance, supporting investor appetite for equities. The index has also benefited from continued momentum in technology and artificial intelligence stocks.

On the other hand, bond yields, oil prices, and geopolitical tensions remain among the key risks that could weigh on markets if they lead to renewed inflationary pressures. Therefore, US economic data, Federal Reserve decisions, and corporate earnings will remain key drivers of the US500 outlook. 

Figure: US500, H4, Trading ViewFigure: US500, H4, Trading View

Figure: US500, H4, Trading View

From a technical perspective, as per analyst analysis, the S&P 500 is trading within an overall uptrend on the four-hour chart, forming a series of higher highs. The index is also trading above the 100- and 200-period simple moving averages, indicating that longer-term momentum remains positive.

The 7,696.09 level represents a key turning point, acting as a major support level and the most recent higher low. A break below this level, followed by a four-hour candle close beneath it, could signal a potential shift from an uptrend to a downtrend. Conversely, holding above this level without forming a lower low could support the continuation of the bullish trend and positive momentum.

In the short term, the index could experience a corrective pullback toward the demand zone between 7,713 and 7,720, based on Fibonacci levels, before attempting to resume its upward move. If positive momentum remains intact, the probability of the index reaching a new high and extending its uptrend could increase.