US stock indices increased following President Trump’s decision to ease tariffs on non-retaliating countries, providing relief to the markets. However, the ongoing trade tensions with China remain unresolved, leaving the timeline for progress uncertain.
The S&P 500 rose sharply, filling a gap from last week’s trading and testing a key level near 5402. A break above this level could lead to the next target at 5491.24, which is the 50% retracement from the 2025 high.
NASDAQ Gains Insight
The NASDAQ also experienced gains, surpassing the September 9 swing low at 16,668.57. It briefly exceeded the 38.2% retracement level of the decline from the 2024 peak, with a current high of 16,860.51, suggesting potential movement towards the 17,238.24 target.
This initial passage highlights how recent policy shifts in Washington, specifically the partial removal of tariffs on select trade partners, have boosted market sentiment among investors. While this has eased pressure on global commerce, uncertainty remains due to strained relations between the U.S. and China. That lack of resolution means any positive momentum still runs the risk of stalling if negotiations falter or further barriers emerge.
From a technical perspective, the S&P 500’s rally has been noteworthy, particularly in reclaiming last week’s downward gap and challenging the 5402 range. This stretch has acted as resistance in the past and its retest now invites close attention. We see that, should this area be overtaken with sufficient volume and confirmation, the path toward the 5491 level opens up—this midpoint from back in 2025 holds relevance across multiple timeframes.
Technical Analysis and Future Projections
Looking at the NASDAQ, the recovery over the September trough at 16,668.57 hints that buyers currently have the upper hand. The latest high of 16,860.51 peeks above the 38.2% resistance of the prior decline, which implies that the uptrend still has room to extend towards 17,238.24, assuming no interruption from macro events or volatility spikes. That target ties into a previous consolidation area, so traction above this level may require strong buying pressure, not simply residual strength from broader index moves.
At this point, we’re dealing with multiple resistance zones being probed, and depending on whether these give way or not, momentum could swing sharply. The behaviour around these retracement targets will direct much of the sentiment. For traders dealing in equity-linked derivatives, range breaks—both actual and failed—often come with increased positioning opportunities. That said, defensive offsets should be considered, especially when carrying exposure overnight.
We should not underestimate how external variables, such as ongoing geopolitical policies or unexpected data releases, can derail short-term technical setups. The existing upward move cannot be fully trusted until those resistance levels convert into consistent support over a few sessions. Tight spreads and options volume near the current price levels may signal dealer interest, which is worth tracking for hints of direction.
Going forward over the next few weeks, expect markets to be susceptible to abrupt pullbacks if no real development arises from trade negotiations. Therefore, any push higher through prior highs should be met with healthy scepticism unless supported by sustained call buying or strong breadth across sectors. What we’re seeing is not yet a new trend—it’s a reaction.
