Current Market Overview

The S&P 500 experienced a significant decline last week, marking a downward trend for five out of the last six weeks. Investors are increasingly concerned about the potential repercussions of tariff implementations and the overarching outlook for economic stability.

Recent Trading Performance

After dropping 2% on Friday, the S&P 500 closed at 5,581, now trading approximately 9% lower than its record high achieved last month. The unpredictable tariff policies from the Trump administration have led investors to speculate about rising inflation and a possible slowdown in economic growth.

Technical Analysis: Flag Pattern Breakdown

Recently, the S&P 500 fell below its 200-day moving average and formed a flag pattern earlier this year. However, it broke down from this pattern in the latest trading session, suggesting a potential continuation of the downward trend. Additionally, the relative strength index has struggled to rebound beyond the 50 mark, indicating weak purchasing momentum in the market.

Key Support Levels to Watch

Investors should keep an eye on the following support levels:

• 5,445: This level might act as initial support, correlating with previous consolidation lows from the past year.
• 5,260: A critical technical level, this area includes significant price points from previous trading highs and pullbacks.

Failure to maintain these support levels could lead to further declines in the index.

Potential Resistance Levels

On the upside, the following resistance levels are noteworthy:

• 5,875: This level serves as a resistance point as it aligns with the downward-sloping 50-day moving average and a trendline connecting various peaks.
• 6,090: A breakout above 5,875 could signal a rise to this area, which encompasses multiple peaks just beneath the index’s all-time high.

Market watchers will closely analyze these levels for potential breakout or reversal opportunities.