S&P 500: Will There Be a New Bull Market?

SP500

Key zone: 6,600 - 6,700

Buy: 6,700 (on a strong breakdown of 6,650); target 6,850; StopLoss 6,630

Sell: 6,600 (on strong negative fundamentals); target 6,450-6,400; StopLoss 6,650

The stock market today reflects a strong contradiction between expectations and reality. Shares of technology and industrial giants continue to play a key role in how investors allocate capital.

• The forward P/E ratio for the S&P 500 remains at 22–23x, corresponding to historical highs. UBS analysts are confident this is one of the best figures since 1985.
• PMI data confirm growth, especially in the technology and manufacturing sectors.
• The largest corporations continue to deliver strong results, but mid- and small-cap companies are recording declining revenues and downward revisions of forecasts. These segments are more vulnerable to tighter financial conditions, supply chain disruptions, and reduced demand.
• The technology sector tied to artificial intelligence shows revenue growth, improved margins, and positive outlooks, which supports investor demand.
• Optimism about earnings through the end of 2025 and into next year is extremely overstated, and we must be prepared for downward revisions over the coming quarters.

An additional support factor is large-scale buyback programs. Without buybacks, the market would be about 40% lower. In 2025, the total volume of repurchases is expected to exceed $1 trillion. Against this backdrop, the probability that the S&P 500 will reach or even surpass 7000 points by year-end remains high.

From a technical analysis perspective, stock indexes are trading above key moving averages, and market momentum remains positive. This limits the likelihood of a deep decline in the short term.

Main Bullish Drivers:

• Fed rate cuts;
• strong results of AI companies;
• global liquidity;
• positive capital flow dynamics.

At this point, the stock market has not yet made up its mind, so we should keep an eye on the main components of inflation (wages, services, energy). Any error - in inflation estimates, Fed actions or corporate reporting - could trigger a correction phase. In this case, the fall will be deep and prolonged.

So we act wisely and avoid unnecessary risks.

Profits to y’all!