What Happened in the Markets Last Week
Major Indexes Post Best Week Since November
The S&P 500 gained 3.6% for the week while the Nasdaq surged 4.7%, marking their strongest weekly performances since November. Despite Friday’s modest decline, all three major indexes posted solid gains amid ongoing geopolitical tensions.
Energy Sector Leads Market with 34% Gains
Energy stocks have surged 34% year-to-date, making it the clear sector leader as oil prices rally on supply disruptions. The Energy Select Sector SPDR has gained 28.2%, with traders now growing more cautious on the red-hot sector.
US-Iran Conflict Drives Oil Price Surge
The six-week conflict between the US and Iran has created supply concerns, with oil prices boosting energy stocks significantly. A fragile two-week ceasefire remains in place, though Pakistan is reportedly working on a potential diplomatic solution.
Gas Prices Could Hit $5 Per Gallon
JPMorgan warns gasoline prices could exceed $5 per gallon if the Strait of Hormuz remains effectively closed by mid-April. US retail gas prices have already climbed to nearly $4 per gallon due to the ongoing Middle East conflict.
Tech Stocks Rally Led by Semiconductors
The Nasdaq posted strong gains Friday, driven by semiconductor stocks including Nvidia and Broadcom. Technology shares helped push the index to a 4.7% weekly gain despite broader market concerns about geopolitical tensions.
S&P 500 Weekly Outlook
The S&P 500 enters the week around 6,582, sitting below both its 50-day MA (6,783.63) and 200-day MA (6,644.6) following March’s death cross formation. With the 10-year Treasury yield at 4.31% and the VIX cooling to 19.23, markets face a critical test of the 6,650-6,700 resistance zone amid ongoing inflation concerns.
🟢
Bull Case: What Could Drive the S&P 500 Higher
🎯 Technical Bounce Setup
The S&P 500 has held above the 6,500 psychological support level and appears poised to test resistance at 6,650-6,700. A break above the 200-day MA at 6,644.6 could trigger algorithmic buying and momentum-driven rallies.
🏦 Fed Dovish Stance
Despite recent inflation prints, the Fed maintains expectations for one rate cut in 2026 with the dot plot showing rates ending at 3.4%. Any dovish commentary this week could provide the catalyst needed to push equities through technical resistance levels.
🔴
Bear Case: Risks That Could Weigh on the S&P 500
⚡ Death Cross Overhang
The March death cross formation with the 50-day MA below the 200-day MA historically signals prolonged consolidation or downward pressure. The index trading below both key moving averages creates a technical headwind that could limit upside momentum.
💸 Bond Market Pressure
The 10-year Treasury yield rising to 4.31% represents a 6 basis point increase from the prior session, creating competition for equity returns. Higher yields typically pressure equity valuations, particularly in growth sectors that have driven recent market gains.
📍
Key Market Markers
⬇️ 6,475-6,400 Support Cluster
These levels represent the next meaningful downside support if current levels fail. A break below 6,400 could accelerate selling toward the 6,300-6,315 zone and potentially the deeper 6,000-6,100 area.
📊 4.35% 10-Year Yield
Watch for the 10-year Treasury to approach this level as a key psychological barrier. A sustained break above could signal more aggressive bond selling and create additional headwinds for equity markets.
💥 VIX Below 18
A move below 18 would signal extreme complacency returning to markets. This level often coincides with low-volatility environments that can support steady equity appreciation but also create vulnerability to sudden reversals.
🎯 Fed Funds Futures
Monitor any shifts in 2026 rate cut expectations beyond the current one-cut consensus. Changes in timing expectations could drive significant moves in both bonds and equities this week.
🧠
Bottom Line
The S&P 500 faces a pivotal week testing critical resistance around 6,650-6,700 while navigating persistent inflation concerns and elevated Treasury yields. The recent VIX decline and Fed’s maintained dovish bias provide some support for bulls, but the death cross formation and sticky inflation present meaningful headwinds. A break above the 200-day MA could trigger momentum buying toward 6,750+, while failure at resistance risks a retest of 6,475-6,400 support. Watch Treasury yield action and any Fed commentary for directional catalysts.
Stay ahead of the markets. Join thousands of traders sharing ideas and insights on Traderverse — free on iOS and Web.