S&P 500 forecast: Technical Tuesday – June 9, 2026

US equity futures and European markets moved higher in the first half of Tuesday, extending a rebound in technology shares while easing oil prices offered additional support to investor sentiment. But following last week’s sell-off, it feels far too early to suggest that the bulls are back just yet. We maintain a cautious S&P 500 forecast, especially after the technical damage that occurred on Friday for some of the global indices, gold and major FX pairs.

 

 

Before discussing what factors are supporting sentiment today, which include weaker oil prices and strong Chinese trade data, let’s first have a look at the charts, as this is after all, a mostly technical analysis view of the markets.

 

S&P 500 technical analysis: short-covering bounce?

 

Despite Friday’s sharp sell-off, there has been little in the way of downside follow-through so far. The S&P 500 dropped around 2.9% at the end of last week, breaking through several important support levels along the way. Yet rather than extending those losses, the market has spent the early part of this week consolidating, seemingly waiting for a fresh catalyst before committing to its next move.

 

From a technical standpoint, some damage has undoubtedly been done. The question now is whether buyers can re-establish control around current levels or whether Friday’s weakness marks the beginning of a more sustained correction.

 

 

A key development for the S&P 500 was the break below the 7,500 level, which had served as an important short-term support area. Once that floor gave way, selling pressure intensified, helping to drive the index sharply lower into the close.

 

That said, the recent swing low at 7,334, made on May 19^th, has so far held firm. The market came close to testing that level but found support just above it before recovering modestly. Since then, price action has stabilised, suggesting that neither bulls nor bears have yet gained a decisive advantage.

 

For now, consolidation remains the dominant theme. Nevertheless, the significance of Friday’s breakdown should not be overlooked. The risk remains that selling pressure could re-emerge in the days ahead, particularly if the US-Iran situation drags on.

 

On the upside, the key resistance zone lies between 7,500 and 7,517. This area previously acted as support and may now prove more difficult to overcome. Monday’s high at 7,466 also warrants attention – if the market breaks above it, then let’s see if it can hold there (bullish) or we go back below it immediately (bearish). Meanwhile, with the 21-day exponential moving average broken, the near-term path of least resistance is – objectively – no longer bullish.

 

Should support at 7,334 eventually give way, the technical picture would deteriorate considerably. That level has become the market’s near-term line in the sand, and a decisive break below it could trigger a deeper retracement. Beyond that, the next support could be around 7,200 while major support remains around the 7,000 mark. While the index remains some distance from that region, a move below 7,334 would increase the likelihood of a test of those lower levels.

 

In short, the S&P 500 forecast from a technical point of view is a little cautious and the index remains in consolidation mode for now. However, a break beneath 7,334 would shift the technical outlook firmly in favour of the bears.

 

Chip stocks lead market recovery as oil retreats on Iran deal hopes

 

The small recovery in the last day and a half follows a sharp sell-off in semiconductor stocks at the end of last week. Concerns over stretched valuations triggered one of the sector’s steepest declines in recent years. Let’s see if there is more downside to come in the days ahead. For now, Micron Technology was among the strongest performers in pre-market trading, after gaining back roughly 10% on Monday. The stock is attempting to recover from a dramatic decline that saw shares lose around a fifth of their value over two trading sessions last week.

 

The broader semiconductor sector came under pressure last week as investors questioned whether enthusiasm surrounding artificial intelligence had pushed chip-related valuations beyond sustainable levels. While the recent rebound suggests bargain hunters are returning, doubts remain over whether the AI-fuelled rally can maintain its momentum through the second half of the year.

 

Falling oil prices improve risk appetite

 

Energy markets also contributed to the more constructive tone across global equities. WTI fell around 2% after a fresh dose of jawboning from Trump. His comments have raised expectations of a potential diplomatic breakthrough with Iran. Trump suggested an agreement could be reached within days, potentially allowing the Strait of Hormuz to reopen fully to international shipping. He’s been saying similar things for a while now, and nothing has changed.

 

Nevertheless, tensions in the Middle East remain elevated. Iran paused military action against Israel on Monday but warned that further operations could resume if Israeli activity in Lebanon continues. Meanwhile, Israeli minister Benjamin Netanyahu indicated that the confrontation involving Iran and Hezbollah remains unresolved, highlighting the fragile nature of the current ceasefire environment.

 

China trade data offers fresh support

 

Asian equities received an additional boost from stronger-than-expected trade figures out of China, reinforcing hopes that external demand remains resilient despite ongoing geopolitical uncertainty.

 

Official customs data showed Chinese exports increased 19.4% year-on-year in May, accelerating from April’s 14.1% pace and comfortably exceeding economists’ expectations of a 15% rise.

 

Technology-related shipments, particularly those linked to artificial intelligence infrastructure, were a major contributor to the stronger performance. The sector continues to provide an important growth engine for China’s export economy, helping offset challenges elsewhere.

 

Perhaps most notable was the sharp increase in shipments to the United States. Exports to the U.S. surged 35.4% from a year earlier, marking the strongest growth rate since March 2021.

 

The figures suggest a significant recovery in bilateral trade flows following an extended period of weakness. Throughout much of last year, exports to the U.S. were weighed down by the impact of President Trump’s tariff policies, resulting in a prolonged stretch of double-digit declines.

 

For investors, the combination of resilient Chinese trade, stabilising chip stocks and softer oil prices has helped improve market sentiment. However, questions surrounding AI valuations and lingering geopolitical risks are likely to remain key drivers of market direction in the weeks ahead.

 

 

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R