Key Points
- The S&P 500 hit a new record high on Monday. The market is kicking off a huge week that includes a Fed meeting, U.S.-China trade talks, and Big Tech earnings.
- Hopes for a Fed rate cut, strong earnings, and AI enthusiasm have driven the recent rally.
- The S&P 500 is now up 40% from its low for the year.
- Technical indicators are bullish but also suggest a short-term pullback is possible.
The S&P 500 kicked off a massive week for the markets by hitting a new record high, gaining 0.84% to 6,848.96 on Monday. Investors are feeling optimistic as they prepare for a flood of major news, including high-stakes trade talks between the U.S. and China, a key Federal Reserve interest rate decision, and a wave of earnings reports from the biggest names in tech.
The benchmark index surged on Friday after a soft inflation report boosted hopes for another Fed rate cut. That positive momentum has carried over into this week, with the S&P 500 now up an impressive 40% from its year-to-date low.
Strong corporate earnings, massive enthusiasm for AI stocks, and the expectation of further Fed easing have fueled the rally.
This week, all those factors will be put to the test.
On the trade front, President Trump is set to meet with Chinese President Xi Jinping, a crucial meeting that could either de-escalate or reignite the trade war.
On the economic front, the Fed is widely expected to cut interest rates at its Wednesday meeting. On the corporate front, tech giants Meta, Microsoft, Alphabet, Amazon, and Apple are set to report their latest earnings.
From a technical perspective, the S&P 500 is in a clear uptrend. However, some indicators suggest the market might be due for a short-term pullback or consolidation after such a strong run.
