Markets head into Friday with renewed focus as all eyes turn to the U.S. Non-Farm Payrolls report—one of the most influential data releases for assessing labor market strength and shaping Fed policy expectations. Meanwhile, the S&P 500 is showing early signs of a potential trend reversal after a multi-week downtrend, with technical indicators now pointing to a shift in momentum. Amid a backdrop of weakening manufacturing data and cautious economic sentiment, traders will be closely watching whether Friday’s jobs report adds fuel to the recovery—or reinforces broader market hesitation.
The S&P 500 has exhibited a well-defined downtrend since reaching a peak of 6149.50 on February 19, marked by a series of lower highs and lower lows—classic signals of sustained bearish momentum. A temporary bottom was established at 5506.57 on March 13, where a short-lived recovery lifted the index above the 20-period Exponential Moving Average (EMA), suggesting a brief pause in selling pressure and rising investor uncertainty.
That said, the rally proved shallow and lacked follow-through, with price action subsequently retreating below both the 20- and 50-period EMAs, thereby reaffirming the broader bearish bias.
More recently, a bottom failure swing pattern has developed. The trough at 5100.90 held above the previous low, and the price subsequently broke through resistance at 5492.67, effectively signaling a trend reversal. This breakout marks the end of the prior downtrend and the potential start of a new bullish phase.
Momentum indicators support this shift in sentiment. The Momentum Oscillator has risen above the 100 baseline, reflecting increasing upside pressure, while the Relative Strength Index (RSI) remains above the 50 neutral level, confirming the emergence of positive momentum.
However, the 20-period Exponential Moving Average (EMA) has yet to cross above the 50-period EMA, tempering the bullish outlook with a note of technical caution.
Key Resistance Levels
Should the buyers maintain market control, traders may direct their attention toward the four potential resistance levels below:
5672.15: The initial resistance level is established at 5672.15, which mirrors the weekly resistance, R1, calculated using the standard Pivot Points methodology.
5788.72: The second price target is set at 5788.72, reflecting the peak formed on March 26.
5993.77: The third price objective is observed at 5993.77, corresponding to the trough marked February 10.
6149.50: An additional upside target is projected at 6149.50, mirroring the daily high formed on February 19.
Key Support Levels
Should the sellers regain market control, traders may consider the four potential support levels listed below:
5492.67: The initial support level is seen at 5492.67, corresponding to the trough marked April 10.
5386.53: The second support level is estimated at 5386.53, representing the weekly Pivot Point, PP, estimated using the standard methodology.
5100.90: The third support level is identified at 5100.90, reflecting the trough marked April 21.
4800.73: An additional downside target is 4800.73, mirroring the daily low marked April 7.
Fundamentals
US manufacturing activity continued to contract in April, marking the second straight month of decline after a brief two-month expansion, according to the latest ISM Manufacturing Report. The Manufacturing PMI fell slightly to 48.7 from 49 in March, with key components such as production, new orders, and exports remaining in contraction territory. Notably, the Production Index dropped to 44, and the New Export Orders Index fell sharply to 43.1.
Despite weakness in demand and output, supplier deliveries and inventories expanded, partly due to efforts to front-load ahead of potential tariffs. Employment showed minor improvement but remained in contraction. Overall, the data reflect ongoing uncertainty, softer demand, and cautious business sentiment in the manufacturing sector.
Conclusion
In conclusion, the stage is set for a pivotal Friday as the Non-Farm Payrolls report takes center stage. With the S&P 500 showing early signs of a trend reversal and momentum indicators turning more constructive, market sentiment hangs in the balance. A strong jobs print could reinforce the developing recovery, while a disappointing reading may revive risk-off behavior. Traders should remain alert, as both technical and macro signals suggest a market at a key inflection point.
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