The S&P 500 broad market index futures
surged by 3.2% to 5,471 points, marking a near-complete recovery of April’s 14%
decline. With just 2.3% left to reclaim the 5,600-point threshold, the rally is
being fuelled by a string of positive developments.
U.S.-China trade tensions appear to be easing
after China urged for peaceful negotiations and President Donald Trump pledged
to lower tariffs on Chinese imports. Meanwhile, fears over Federal Reserve
Chair Jerome Powell’s potential dismissal have subsided, with Trump softening
his stance—emphasising he merely wants the Fed to ease policy slightly.
Treasury Secretary Scott Bessent further calmed markets by suggesting a mutual
reduction in tariffs before formal talks begin, a proposal China may consider.
Adding to the momentum, Alphabet (GOOG)
exceeded Q1 2025 earnings expectations on both earnings per share and revenue.
The tech giant also raised its dividend by 5.0% and announced a massive $70
billion share buyback programme, sending its stock up 5.4% to $170.19 in
premarket trading. This performance is likely to boost sentiment ahead of next
week’s results from other tech heavyweights including Microsoft (MSFT), Apple
(AAPL), Amazon (AMZN), and Meta Platforms (META).
This week’s turnaround has been impressive.
After falling to 5,154 points on Monday, S&P 500 futures have rebounded by
6.1%, surpassing primary upside targets at 5,310–5,410 and now aiming for
extreme targets in the 5,750–5,850 range. A drop below 5,300 would be needed to
invalidate the current bullish setup.
Large investor activity supports the rally. The SPDR S&P 500 ETF Trust (SPY) reported net inflows of $4.1
billion this week, reversing last week’s $4.8 billion outflow. Final figures
are expected to show even stronger demand as optimism prevails.
In commodities, Brent crude briefly touched
the $67–69 resistance zone before pulling back, though medium-term targets
remain at $74–75 per barrel. Short-term support lies between $57 and $59.
Gold corrected sharply from a record high of
$3,499 per troy ounce, dropping 5.8% to $3,298. While short-term support is at
$3,250–3,280, a deeper retreat toward $3,000 remains possible if that support
is breached.
In currency markets, the U.S. Dollar is
regaining ground. The EURUSD fell to 1.13580 from Monday’s 1.15730 peak amid
easing global trade tensions. The pair remains under pressure with initial
downside targets at 1.10500–1.11500, and further potential declines toward
1.0600–1.0700 in the coming months.