Insights 
VT 
Key Points
- S&P 500 remains anchored near record highs, led by technology and AI-linked stocks.
- Strong US data lifts the dollar and trims expectations for near-term Fed rate cuts.
The S&P 500 continued to consolidate just below record highs on Friday, reflecting resilient risk appetite despite a less supportive interest rate backdrop.
Gains in technology and financial stocks have kept the index well bid, with renewed confidence in artificial intelligence spending helping to stabilise sentiment after a choppy start to the year.
Futures linked to the S&P 500 added modestly during Asian trading, tracking a strong session on Wall Street overnight. The index’s ability to hold elevated levels suggests traders remain comfortable maintaining equity exposure, even as expectations for rapid monetary easing fade.
AI and Earnings Expectations Drive Index Leadership
Technology remains the primary pillar of strength for the S&P 500. Solid results from key semiconductor players in Asia have reinforced confidence that demand linked to AI infrastructure remains intact, supporting valuations across the broader US tech complex.
This renewed momentum has eased concerns that capital expenditure cuts could derail earnings growth in 2026. For the S&P 500, continued leadership from mega-cap technology names remains critical, given their outsized weighting within the index.
Firmer Data Limits Aggressive Upside
At the same time, a series of upbeat US economic releases has reduced expectations for near-term Federal Reserve rate cuts.
Markets are now increasingly pricing in a steady policy outcome in April, with the first cut potentially pushed further into the second half of the year.
While this shift has supported the US dollar, it has not yet undermined equity sentiment. Instead, the S&P 500 appears to be transitioning into a phase where upside is driven more by earnings delivery and productivity gains rather than policy accommodation.
Technical Analysis
The S&P 500 continues its steady climb, holding above the 6900 zone after months of upward channel formation.
Price remains well-supported by the 5-, 10-, and 30-day moving averages, all of which are sloping upward and acting as dynamic support.
The MACD has crossed above the signal line, but momentum is soft—showing neither strong bullish nor bearish conviction. Histogram bars are short, indicating consolidation or a potential pause before a directional push.
Near-Term Outlook
Technically, the S&P 500 remains in a clear upward trend, with pullbacks continuing to attract buyers. As long as the index holds above its recent breakout zone, the broader bias stays constructive.
In the near term, traders are likely to focus on upcoming US inflation data and earnings updates to assess whether current valuations can be sustained.
A stable macro backdrop combined with continued AI-led earnings strength would keep the path of least resistance higher, even if gains become more measured from here.
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