Geopolitical risks overshadow easing inflation expectations, keeping the S&P 500 near resistance levels amid Fed tightening concerns.
The S&P 500 remains under pressure as escalating US-Iran tensions counterbalance recent dovish repricing in rate expectations following softer US inflation data. The index has traded in a tight range, with overcrowded positioning leading to broad deleveraging.
Despite signs of peaking inflation, the Federal Reserve’s tightening bias and geopolitical risks are limiting upside. Traders are closely monitoring US-Iran developments, with further escalation likely to sustain market pressure. A resolution could trigger a rebound toward record highs.
Technical resistance at 7,630 has capped gains, while support near 7,475 may attract buyers if the index retreats further.