S&P 500 Bounces Back After Sharp Decline – Is the Bull Market Still Intact?

Summary:
• The S&P 500 rebounds after a 10% slide, reclaiming 5,700. Is this a true recovery or just a temporary bounce?

After a streak of red days that saw the S&P 500 slide over 10% from its recent peak, the index is finally back in the green. Investors are breathing a sigh of relief as the broad market benchmark rebounds from its steep correction, reclaiming the 5,700 level. The question now is whether this marks the start of a new leg higher or just a temporary bounce in an increasingly volatile market.

Key Factors Driving the S&P 500’s Recovery

1. Easing Inflation and Federal Reserve Policy Adjustments
   • Recent economic data suggests inflation is cooling, reducing pressure on the Fed to maintain its hawkish stance.
2. Tech Sector Strength and AI Boom
   • Big tech has led the rally, particularly AI-driven stocks, which remain resilient despite broader market concerns.
3. Resilient Corporate Earnings
   • Companies are demonstrating pricing power, and profit margins have remained stable despite macroeconomic headwinds.
4. Investor Sentiment Shift
   • Wall Street analysts are turning cautiously optimistic, with many seeing the recent pullback as a healthy correction rather than the start of a bear market.

Technical Analysis: Key Levels to Watch

• Current Price: 5,699.90
• Key Resistance Levels: 5,750, 5,900, 6,000
• Key Support Levels: 5,600, 5,500, 5,400
• Market Trend:
  • The S&P 500 remains above its 200-day moving average, signaling that the long-term uptrend is still intact.
  • RSI has moved out of oversold territory, suggesting the potential for further upside if momentum holds.

Outlook: Is the Bull Market Resuming?

While the S&P 500’s rebound is encouraging, traders should remain cautious amid lingering macroeconomic risks. The Federal Reserve’s next policy moves, corporate earnings revisions, and ongoing geopolitical uncertainties will be critical in determining whether the index can sustain its recovery.

A decisive break above 5,750 could reignite bullish momentum, potentially paving the way toward fresh all-time highs. However, failure to hold above 5,600 may signal further downside risk. Investors should watch for confirmation signals before calling this a full-fledged recovery.