The S&P 500 broke a three-month winning streak with its first monthly decline since March, yet it still gained more than 14% in the second quarter. Technical analysts point to the index's quick recovery above its 50-day moving average as a sign the rally may not be finished.
The S&P 500 lost its three-month winning streak in June, but several signals suggest the broader rally still has room to run. According to a Reuters market analysis, the benchmark posted its first monthly decline since March, ending a stretch that had carried equities to record highs.
Even with June's retreat, the index gained more than 14% during the second quarter, its strongest quarterly showing since the rebound that followed the pandemic-driven collapse in Q2 2020. The first half of 2026 was also strong, with the S&P 500 up roughly 9.5% through six months — its best first-half performance since 2024, when the benchmark advanced about 14.5%.
Buyers reclaim the 50-day line
Technical analysts say one of the more encouraging developments has been the index's quick recovery above its 50-day moving average, a widely watched gauge of intermediate-term momentum. After briefly falling below that level for the first time since early April, the S&P 500 reclaimed it and has stayed above it — a pattern many read as evidence that buyers keep stepping in on dips.
Reuters described the move plainly. According to Reuters, the "recovery above the 50-day moving average is generally viewed as a bullish momentum signal," the news agency noted in its chart analysis.
The levels traders are watching
The benchmark currently trades around 7,483, about 1.7% below its record closing high of 7,609.78 set in early June and roughly 1.8% under its intraday peak of 7,620.90. If the rally resumes, the first resistance sits near 7,530, followed by another zone around 7,578, with the psychologically significant 8,000 mark cited as the next major target beyond fresh records.
Reuters cautioned that the bullish case is not guaranteed. A drop below the rising 50-day average near 7,385 could weaken the technical picture, turning attention to support around 7,294 and, if selling deepens, toward roughly 7,238.
Away from the headline index, money is still moving between sectors. Writing for TheStreet Pro, technician Bob Lang described the action as rotation — funds shifting out of software into retail, or out of semiconductors into staples — which he called a healthy condition as long as capital stays in equities. With earnings season underway, he noted the MACD remains on a buy signal while momentum reads overbought.
Sources: International Business Times, TheStreet Pro (snippet-based)
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