S&P 500 Index Sets Record High

As shown by the S&P 500 chart (US SPX 500 mini on FXOpen), the stock index:
→ has increased by approximately 3.5% since the start of the year;
→ surpassed its previous all-time highs set in December.

Market participants’ optimism was driven by:
→ a strong start to earnings season and expectations of robust reports from major tech companies;
→ statements made by Donald Trump at the Davos forum, where the US president urged Saudi Arabia to lower oil prices and expressed the view that interest rates should be reduced. Overall, such measures are expected to foster economic growth.

Reuters quoted Lindsay Bell, Chief Strategist at 248 Ventures: buyers "like the idea of interest rates coming down, of oil prices coming down. All in all, the market is optimistic the more they hear about Trump policies. We're just seeing a reflection of that optimism."

Technical analysis of the S&P 500 chart (US SPX 500 mini on FXOpen) reveals:
→ At the end of 2024, price fluctuations formed an ascending channel (marked by blue lines).
→ The December dip appears to be a correction within the prevailing uptrend. Bears managed to push the price below the lower blue line, but only for about a week.
→ After breaking the correction channel (shaded in orange), bulls faced brief resistance (indicated by the arrow) at the 6040 level.
→ The RSI indicator is in the overbought zone and signals divergence. This suggests a minor pullback could occur, potentially testing the aforementioned 6040 level.

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