7 min read The S&P 500 closed Friday at a fresh all-time high near 7,399, capping its sixth consecutive winning week, the longest run since 2024. The Nasdaq also closed at fresh records, and the rally has been built on a combination of strong Mag7 earnings, a resilient labour market, and a tenuous but holding US-Iran ceasefire.
Friday’s April NFP added fuel to the move. Payrolls came in at 115K against consensus of around 62K, March was revised up to 185K, and unemployment held at 4.3%. It’s the first back-to-back monthly increase in nearly a year, and it has effectively wiped out what was left of rate-cut pricing for 2026. CME FedWatch now shows roughly 70% probability of no change for the rest of the year, with a small but rising 17% probability of a hike.
The next big test arrives almost immediately. April CPI is due tomorrow (Tuesday 12 May at 12:30 UTC), and it’s arguably the biggest catalyst of the week. Later in the week, attention turns to the Trump-Xi summit on 14-15 May, with markets treating it as an implicit deadline for an Iran resolution. Beyond that, Nvidia reports on 20 May.
Since our last S&P 500 article, the index has put on roughly another 3%, with both the FOMC and the bulk of Mag7 earnings resolving bullishly.
Key takeaways
- The S&P 500 is at fresh record highs after six straight weekly gains, the longest streak since 2024
- April NFP at 115K came in well above the ~62K consensus, with unemployment steady at 4.3%
- Rate-cut pricing for 2026 has effectively been erased, with the curve now leaning slightly hawkish
- April CPI tomorrow is the biggest catalyst of the week, with core consensus at 0.3% MoM and 2.7% YoY
- The Trump-Xi summit on 14-15 May is being framed as the implicit deadline for an Iran resolution
- Nvidia reports on 20 May, the next major Mag7 catalyst after this week
What to watch this week
The combination of record highs, no rate cuts on the horizon, and a still-active geopolitical risk premium is unusual. Historically, the kind of macro backdrop we have right now (oil near $100, a war in the Middle East, the Strait of Hormuz closed, and the Fed firmly on hold) would put pressure on risk assets. Instead, the S&P 500 has continued to grind higher on the strength of corporate earnings and AI-driven capex.
Tomorrow’s CPI print is the cleanest test of that resilience. A core reading above 0.3% MoM could potentially signal that elevated energy prices are starting to bleed into non-energy categories, which could reinforce the no-cut narrative or even revive the hike conversation. A softer print could potentially keep the rally intact.
Daily chart
The S&P 500 has had a very impressive last few weeks, with a major breakout above the 7,000 region, and it doesn’t seem to be slowing down any time soon. On the daily, price is trading above the RSI 70 level and has held there for longer than it typically has during previous extensions. The Accumulation/Distribution indicator is continuing to show clear signs of an uptrend and momentum.
At the time of writing, the index is only about 1.5% below the 7,500 level. Even though RSI is well in the overbought area, momentum is still very strong and we are not seeing any clear signs of a reversal just yet.
If we do see a retracement, one potential level to watch could be the area around 7,200, which marks the most recent prior consolidation zone before the latest leg higher. Below that, 7,000 and the 6,750 zone could potentially come back into focus.
4-hour chart
On the 4-hour timeframe, the structure is very clean, with a clear sequence of higher highs and higher lows. Price is trading near the recent highs around 7,394, holding well above the most recent reaction lows.
Looking at the RSI on the 4-hour, we do see a potential bearish divergence building, with price making higher highs while RSI prints lower highs. There’s also an untested support level around 7,262.
Just because there’s a bearish divergence here does not mean we have to get a reversal. We need to see confirmation in price first. Potential confirmation of a break in structure on the 4-hour could possibly come from a break below the 7,320 level (the most recent 4-hour higher low). Until then, the trend is very strong and bulls are firmly in control.
What to watch
- 7,500 as the next round-number resistance, roughly 1.5% above current levels
- 7,320 as the 4-hour structure level. A break below this could potentially signal a shift in the short-term trend
- 7,262 as the first untested support on the way down
- 7,200 as the broader daily support zone on any deeper pullback
- April CPI tomorrow at 12:30 UTC, the biggest macro catalyst of the week
- The Trump-Xi summit on 14-15 May, with markets watching for any breakthrough on Iran
- Any further developments in the Strait of Hormuz, where US and Iranian forces exchanged fire on 7-8 May
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