The S&P 500 struggles to maintain its eighth consecutive day of gains on Friday. By noon, the index was up 0.2%, helped by a slightly lower-than-expected core Consumer Price Index (CPI) reading and expectations for a negotiated agreement between the U.S. and Iran this coming weekend, before falling to -0.1% in the behind schedule afternoon.
Over the past eight sessions, the S&P 500 has risen nearly 8% from its March 30 lows, particularly boosted by the initial call for a ceasefire on Tuesday evening. U.S. Vice President J.D. Vance travels to Islamabad, Pakistan, along with other U.S. negotiators to secure a peace deal with Iran as Israel’s continued bombing of Lebanon threatens the start of talks.
The speaker of Iran’s parliament and chief negotiator, Mohammad Ghalibaf, wrote on the site X two reservations regarding the initiation of talks that could become an obstacle to any talks.
Unconfirmed reports emerged on Friday afternoon that the United States had released $7 billion worth of Iranian funds held in Qatar. It’s a good sign that talks will take place on Saturday, but Israel’s aggressive military operation in Lebanon threatens to derail any agreement.
Additionally, Iran on Friday largely kept the Strait of Hormuz closed, arguing that it will not be fully open to tanker traffic until Israel and the United States comply with the provisions of their 10-point plan.
Overall, only the technology and materials sectors showed gains through the afternoon, while the energy, financial and healthcare sectors saw widespread selling. The NASDAQ Composite (IXIC) remains up 0.2%, while the Dow Jones Industrial Average (DJIA) is down half a percentage point.
Economic data paints a bleak outlook
The March CPI report showed a 10.9% enhance in energy costs due to the Strait of Hormuz closure, but persistent core inflation raised hopes that the Federal Reserve (Fed) may not need to tighten policy further.
March CPI rose from 2.4% to 3.3% year-over-year, but the market welcomed the yearly core CPI, which rose only a tenth of a percent to 2.6%.
Still, Michigan’s preliminary consumer sentiment index for April dropped from 53.3 to 47.6, showing that American consumers are quite bleak about rising fuel prices.
JM’s preliminary annual consumer inflation expectations for April showed a sturdy enhance from 3.8% to 4.8%, which tells us that consumers may moderate their spending until oil prices return to pre-war levels.
S&P 500 daily chart analysis
The S&P 500 is witnessing its first rebound after rising 500 points in the previous seven trading days. The initial ceasefire announcement on Tuesday evening led to an upside gap on Wednesday, but Friday’s ceasefire uncertainty put pressure on stocks.
Bulls have the right to remain positive now that the index is above the 6,800 level. This price has acted as resistance and support since October last year and should become the basis for consolidation if a peace plan is implemented in Islamabad this weekend.
A relative strength index (RSI) of 60 tells us that momentum remains in a positive direction for now. A solid agreement on the opening of the Strait of Hormuz will trigger a wave of buying that could quickly push the index back to historic highs around 7,000.
However, if the talks fail, expect a quick return to 6720 next week. This was the support level during the December 17, 2025 sell-off.
