The S&P 500 holds near record highs as Iran de-escalation lifts risk. These are the key levels to watch

The S&P 500 is holding near record territory after a broad risk-on session on Wednesday, with signs that the conflict in the Middle East could be moving towards a resolution. Here is the macro picture in brief:

• Risk rallied. President Trump said the US was in the “final stages” of a deal with Iran, sending oil lower and lifting stocks and bonds together. The index closed Wednesday around 7,433 (up roughly 1.1%), the Dow closed back above 50,000, and the Nasdaq added around 1.5%.
• Oil slid sharply. WTI fell around 5.7% to near $98 and Brent dropped to around $105, as easing tail risk unwound some of the war premium. The Strait of Hormuz remains largely closed, so the supply picture is not yet resolved.
• Nvidia beat but slipped. Revenue rose around 85% year on year to $81.6 billion, ahead of consensus, with current-quarter guidance near $91 billion. Shares still eased around 1% after hours, and index futures softened early Thursday.
• Yields stay elevated. The 10-year sits near 4.65% and the 30-year recently touched an 18-year high near 5.2%. April Fed minutes showed officials leaning towards holding rates, with a possible hike before year-end.

The result is a two-sided picture: easing geopolitical risk and falling oil support equities, while high long-end yields and a less dovish Fed could cap the upside.

Daily chart

On the daily timeframe, the S&P 500 printed a strong bullish candle on Wednesday that closed near its highs, pointing to renewed buying interest after the recent pullback from the record highs we flagged in our last S&P 500 article.

• The bounce came from the 0.382 fib around 7,360, a shallow retracement that keeps the broader uptrend intact
• The move sets up a potential higher swing low, which could keep the structure constructive as long as it holds
• Price is now working back towards 7,500, the recent swing high and the key resistance overhead

4-hour chart

On the 4-hour timeframe, momentum has turned back in favour of the bulls. Price has reclaimed both the 20 EMA (white) and 50 EMA (blue), and a low timeframe break of structure points to strengthening short-term momentum.

• The RSI has reclaimed the 50 level, moving back into bullish territory
• The Accumulation/Distribution line is breaking into new highs, a sign that buying pressure is building beneath price
• A continuation from here could bring the 7,500 level into play

Key levels to watch

Resistance:

• 7,500 — the key level overhead and recent swing high

Support:

• 7,360 — the 0.382 fib and the level of Wednesday’s bounce
• 7,320 — the 0.5 fib
• 7,280 — the 0.618 fib, reinforced by the rising 4-hour 50 EMA
• 7,105 to 7,160 — the major demand zone and structural support below

What to watch

• Developments in the US-Iran talks for confirmation that the de-escalation can hold
• Oil prices, with further downside potentially supporting risk sentiment and a rebound reviving inflation concerns
• The path of long-end Treasury yields, the main counterweight to the rally
• 7,500 as the immediate decision point, and 7,360 as the first support on any pullback

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