Momentum Builds as Markets Shake Off Trade and Rate Jitters

Investor sentiment turned upbeat as markets digested a wave of significant macro developments, including a new US–UK trade deal, cautious signals from the Federal Reserve, and renewed optimism around US–China trade talks. Despite lingering tariff tensions, equity markets posted broad gains, supported by sector-specific catalysts and improving technical structures. Meanwhile, analysts urged a more measured approach to the rebound, highlighting the importance of portfolio discipline in a still-uncertain global landscape. Against this backdrop, the S&P 500 continues to show signs of strength, with technical indicators pointing to sustained bullish momentum.

Tariffs Stay, Markets Rise: US–UK Deal Opens Doors for Trade Expansion

President Trump announced a new US–UK trade deal that maintains a 10% “reciprocal” tariff but opens key sectors for US exports, including aviation, ethanol, and machinery. The deal includes US acceptance of 100,000 UK autos with the 10% tariff and some relief on steel and auto tariffs, while the UK agreed to scale back its digital services tax. Despite the tariff remaining in place, the S&P 500 rallied, with gains led by Boeing and Rolls Royce. The deal is seen as a potential template for future trade agreements, while optimism over upcoming US–China trade talks also supported market sentiment.

Trump Says Buy, Advisers Say Pause: Markets Rebound Amid Trade Turmoil

As the S&P 500 recovers from last month’s tariff-driven downturn, President Trump encouraged investors to buy stocks. However, financial advisers suggest using the rally to reassess portfolios rather than rush in. With recession fears lingering and trade tensions unresolved, experts recommend increasing cash buffers, considering international diversification, and tuning out short-term market noise. Meanwhile, Bitcoin rebounded on optimism over US–China trade talks, and Florida’s housing market posted its sharpest annual price drop in over a decade.

Wall Street Rises as Powell Hits Pause

US stocks finished higher on Wednesday and Thursday as investors responded to the Federal Reserve’s decision to hold interest rates steady and looked ahead to upcoming US–China trade talks. While a sharp decline in Alphabet shares pressured the Nasdaq, strong gains in Disney helped lift the Dow. Fed Chair Jerome Powell emphasized caution, noting elevated uncertainty in the economic outlook and no immediate need to cut rates. Markets reacted positively, with major indexes ending near their session highs.

Technical Analysis

Following the formation of a key low at 4,800.73 on April 7, the S&P 500 Index has continued to exhibit a constructive technical structure, characterized by a clear sequence of higher highs and higher lows—hallmarks of a developing bullish trend. This positive price action is reinforced by an upward-sloping 50-period Exponential Moving Average (EMA), with the index currently trading above this level. Notably, the 20-period EMA has not yet crossed above the 50-period EMA, which tempers the bullish outlook with a degree of caution.

Momentum indicators continue to support the prevailing uptrend. The Momentum Oscillator remains above the 100 mark, while the Relative Strength Index (RSI) holds above the 50 neutral level—both pointing to persistent buying interest.

Should upward momentum persist, the index may next test resistance at 5,734.78, with further upside potential toward 6,126.55 and 6,149.50. Alternatively, a shift in sentiment could bring initial support into play at 5,492.67, with deeper corrective levels seen at 5,100.90 and the prior swing low of 4,800.73.

Conclusion

In summary, while macroeconomic headwinds persist—from elevated tariffs to geopolitical uncertainty—markets have responded with resilience, buoyed by trade developments, cautious Fed messaging, and renewed global optimism. The S&P 500’s technical backdrop remains constructive, with momentum indicators pointing toward continued strength. However, as analysts caution, now may be a prudent time for investors to reassess their positioning and prepare for potential shifts in sentiment. Going forward, market direction will likely hinge on the outcome of US–China trade negotiations and evolving policy signals from central banks.