Figure: US500, H4, TradingView    Figure: US500, H4, TradingView  

Fundamental outlook

The S&P 500 is trading cautiously as investors weigh easing geopolitical tensions against upcoming US inflation data, particularly the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred measure of inflation.

Meanwhile, lower oil prices have helped ease some concerns regarding inflationary pressures. However, markets remain sensitive to any developments that could increase geopolitical tensions or trigger renewed volatility in energy markets.

Investors are now focused on the upcoming inflation data, as any further moderation in price growth could strengthen expectations for a less restrictive monetary policy stance in the future, potentially supporting US equities. Conversely, stronger-than-expected inflation figures could reinforce expectations that interest rates will remain elevated for longer, limiting the index's upside potential.

Overall, the fundamental outlook according to analysts remains supportive for equities as long as inflationary pressures continue to ease and geopolitical tensions remain contained. Investors will continue to closely monitor inflation data and US Treasury yields for clues regarding the market's next direction.  

The S&P 500 remains in a downtrend on the four-hour timeframe, continuing to form lower lows, which reflects persistent selling pressure in the short term.

Traders should closely monitor the 7,540.55 level, which represents a key resistance zone. Failure to break above this level and establish a higher high would maintain the bearish outlook and support the continuation of the downward trend.

Should bearish momentum persist, attention will shift toward the 7,400.60 level. A break below this support and the formation of a new low beneath it would provide an additional signal that the downtrend is resuming.

At the same time, market momentum has moderated in recent sessions as investors await upcoming economic data, which could play a significant role in repricing expectations for the future path of monetary policy.