The week began with signs of an economic slowdown that raised hopes of easing inflation. Factory orders fell unexpectedly (-0.7%), the labor market appeared to be freezing with only 12,800 job creations according to ADP, and the housing sector was buckling under high rates.

However, the situation completely reversed over the days. The American consumer showed an explosive rebound in confidence (91.2 vs. 87.4 expected), and weekly jobless claims remained extremely low, proving the resilience of the labor market.

The final blow came on Friday with the Producer Price Index (PPI), which rebounded alarmingly (+0.8% for the “Core”), coupled with a sharp acceleration in business activity (Chicago PMI at 57.7).

Investors’ hope of seeing a rapid cut in policy rates evaporated. This expected continuation of restrictive monetary policy firmly supported the dollar, but put equity indices under heavy pressure.

Summary

• Labor market: Solid but less dynamic.
• Inflation and consumption: Persistent overheating.
• Dollar up, but pressure on indices

The week began in a tense diplomatic and trade climate, pointing to new international frictions. The European Union signaled it was ready to freeze its trade agreement with the United States in response to Donald Trump’s tariff threats, while the highly anticipated summit preparations between him and Xi Jinping failed.

The final blow came this weekend with the flare-up in the Middle East. The conflict involving the United States, Israel, and Iran entered a new dimension following Donald Trump’s announcement of the death of Supreme Leader Ali Khamenei in strikes. Hopes for a stable energy market evaporated amid the risk of maritime disruptions.

The market could be very volatile, and it will not necessarily be appropriate to be blindly short, as price could quickly move back up if the conflict is deemed short-lived.

On the AI front, OpenAI has reached a valuation of $840 billion thanks to massive funding from Amazon, Nvidia, and SoftBank. Finally, AMD surged after securing a five-year, $60 billion mega-deal with Meta.

Summary

• A surge in volatility is expected in oil and cryptocurrencies at the market open.
• Tariff tensions are still present but overshadowed by the Middle East conflict.
• Summit with China canceled.

Weekly levels

VPOC : 6903.75
LOW-HIGH : 6828.50-6983.75
VVA : 6837.75

This week, the SP500 closed down 0.42%, following concerns about tech and the deterioration of the situation in the Middle East.

Starting Tuesday, the SP500 began to rise through Wednesday, reaching the week’s high at 6983.75 following Nvidia’s earnings announcement. On Thursday, price saw a sharp drop, bringing it back to last week’s levels, around the 6883–6900 support zone and the weekly VWAP.

On Friday, the index fell again to settle below 6900 and print the week’s low at 6828.50 after the PPI data, which showed persistent inflation. The 6883–6900 zone proved decisive throughout the week, and there is no doubt it will play a crucial role again this week as well.

During Thursday’s sell-off, the market created two single prints at 6927–6932 and 6938–6941. The 6920–6930 zone will act as a wall, but if it is broken, it will form solid support. On the 30-minute RSI, a bullish divergence can be seen and has been confirmed, but the indicator has moved back toward its neutral zone. Its development will need to be monitored tomorrow.

It will be important to monitor the early trading and the direction taken by the SP500. If price moves lower, the weekly VVAL at 6837 should be watched. If this level is broken, the decline could become entrenched. Conversely, if 6920–6930 is broken, the rally could resume. Between the two, patience will be required.

Points of Interest

• 7030-7043 (Major resistance zone + ATH 7043)
• 6993-7000 (Resistance zone + major 7000 Call option zone)
• 6984 (Week’s high)
• 6957-6962 (Resistance zone)
• 6927-6932 and 6938-6941 (Single print)
• 6920-6930 (Resistance zone)
• 6883-6900 (Major resistance zone)
• 6857-6865: (Support zone)
• 6815-6830 (Support zone)
• 6800: (Major puts zone)
• 6828 (Weekly low)
• 6771-6777 (Support Zone)
• 6715-6720 (Support zone)
• 6625-6640 (Major support zone)