S&P500 (SPX) Price Analysis – April 18, 2025

Daily Price Outlook

During Friday's trading session, the S&P 500 Index (SPX) managed to extend its upward momentum, climbing around the 5,282.70 mark with a modest gain of +0.13%.

This positive trend was fueled by a combination of trade optimism between the US and China, growing expectations of Federal Reserve rate cuts, and supportive global economic data that lifted investor sentiment.

S&P 500 Gains Support from US-China Trade Optimism and Tariff Exemptions

However, the bullish bias in the S&P 500 was mainly driven by renewed hopes of a US-China trade agreement. US President Donald Trump struck an optimistic tone, stating that a deal with China could be finalized within three to four weeks.

He further emphasized his reluctance to raise tariffs, acknowledging the potential negative impact on consumer demand.

Adding to the upbeat tone, President Trump also announced exemptions for key tech products—such as smartphones, computers, and semiconductors—from the proposed reciprocal tariffs.

These exemptions favored Chinese-manufactured goods, helping ease trade tensions and boosting investor confidence in the technology sector.

Meanwhile, China’s Foreign Ministry responded assertively, warning the US against further tariff provocations. Nonetheless, market sentiment remained positive, underpinned by hopes that dialogue would continue and lead to a formal agreement.

Fed Rate Cut Expectations Support Wall Street Rally

In addition to trade optimism, growing expectations of Federal Reserve rate cuts contributed to the positive tone in equity markets. According to the CME FedWatch Tool, traders are now pricing in around 86 basis points of rate cuts by the end of 2025, with the first anticipated cut expected as early as July.

Although Federal Reserve Chair Jerome Powell offered a hawkish warning about the risks of persistent inflation amid a slowing economy, markets remained focused on the dovish shift in inflation data.

US CPI inflation eased to 2.4% YoY in March—down from 2.8% in February—while Core CPI also fell to 2.8%, missing estimates and reinforcing the case for monetary easing. This softer inflation outlook weighed on the US Dollar Index (DXY), which slipped to around 99.30.

On the labor front, Initial Jobless Claims dropped to 215,000, beating expectations and signaling a resilient job market. However, Continuing Claims rose to 1.885 million, adding a mixed tone to labor market dynamics.

Strong Global Data Adds to Bullish Momentum

On the other hand, the global economic data also played a key role in supporting risk appetite. China’s economy grew 5.4% YoY in Q1 2025, surpassing expectations of 5.1%, while Retail Sales surged 5.9% and Industrial Production jumped 7.7%, signaling robust domestic activity.

In Australia, despite the unemployment rate rising slightly to 4.1%, job creation remained positive with 32.2K new positions in March. However, Westpac’s Leading Index showed some loss in momentum, easing to 0.6% from 0.9%.

Therefore, the combination of easing trade tensions, hopes for a Fed rate cut, and better-than-expected data from China and Australia has kept the S&P 500 on solid footing. These factors suggest that risk-on sentiment may continue to support the broader market in the near term.

S&P 500 – Technical Analysis

The S&P 500 is consolidating within a symmetrical triangle, trading below its 50-period SMA, currently at 5,307. Price has formed a higher low at 5,212 and is hovering near trendline resistance. The structure suggests indecision, with traders watching closely for a breakout or breakdown confirmation.

The recent pullback from 5,345 has found support at the 5,212 demand zone, which aligns with a rising trendline from the April lows. This zone is reinforced by a prior consolidation area and offers a potential entry point for buyers, particularly if price holds above 5,212.

On the upside, a move toward 5,345 would test the upper boundary of the triangle, followed by the 5,404 level, which marks a key resistance zone from earlier this month. Momentum remains neutral. The RSI stands at 46.30, suggesting a wait-and-see attitude as markets digest recent macro data and earnings.

A breakdown below 5,212 could shift the short-term bias bearish, with downside potential extending toward 5,118 and 5,112. A confirmed bounce from 5,212, however, could provide the foundation for a breakout toward 5,404 and higher.

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