SP500 Rebound Ahead of Fed and Tech Earnings

Key Takeaways

• SP500 traded near 7167.05 after reaching a session high of 7185.35.
• US equity futures recovered after Iran submitted a proposal to reopen the Strait of Hormuz.
• Lower Hormuz risk helped ease inflation concerns tied to oil and shipping disruption.
• Microsoft, Amazon, Alphabet, Meta and Apple earnings are the next major test.
• The Fed decision could shape rate expectations and equity momentum this week.

SP500 started the week under pressure, then recovered as traders reacted to a fresh diplomatic signal from Iran. The index traded near 7167.05, down just 3.41 points, after earlier reaching a session high of 7185.35. The proposal, delivered through Pakistani mediators, focused on reopening the Strait of Hormuz and extending the ceasefire before returning to nuclear talks later.

That helped markets price in a lower short-term risk of deeper energy disruption. The Strait of Hormuz remains central to the inflation story because any extended disruption can lift oil prices, raise fuel costs and pressure broader risk sentiment. Crude remained elevated, with oil still trading above $95 a barrel.

Hormuz diplomacy gives equities breathing room

The rebound was driven by relief rather than full confidence. S&P 500 futures rose around 0.1%, while Nasdaq 100 futures gained roughly 0.3% as traders welcomed the possibility of maritime access improving. However, the wider conflict remains unresolved.

If talks progress and shipping risk eases, SP500 could extend its rally. If negotiations stall again, oil may rise and bring inflation concerns back into focus.

Big Tech earnings become the next test

The next major driver is earnings from Microsoft, Amazon, Alphabet, Meta and Apple. These companies carry significant weight in the index, so their guidance may matter as much as the headline numbers.

Markets want evidence that AI spending is still supporting revenue growth, cloud demand, margins and forward guidance. Strong results could support another leg higher, while weak guidance may pressure the index even if geopolitical risk eases.

Fed decision keeps rate risk active

The Federal Reserve is expected to keep rates unchanged at 3.50% to 3.75%, but Powell’s tone could still move markets. Traders will watch whether higher oil prices make the Fed more cautious on inflation, or whether policymakers still see room for future cuts.

This creates a busy setup for SP500. Diplomacy may help sentiment, but earnings and Fed messaging still need to confirm the rally.

SP500 tests key resistance

From a technical view, SP500 remains in a strong uptrend after rebounding from 6318.04. The index is trading near 7167, just below the 7185 resistance zone. Resistance sits near 7185, followed by 7250 and 7350. Support is seen at 7135, then 7095 and 6890. 

Discover See why diplomacy, earnings and rates matter for the next SP500 move in this article.