S&P500 Forecast: SPX rebounds as trade tensions calm

US futures

Dow futures 0.91%, S&P futures 1.17% & Nasdaq futures 1.68%

In Europe

FTSE 0.09% & DAX 0.22%

US stocks jump as trade tension fears ease
Gold rises to a record high
Fed Chair Powell speaks tomorrow
Oil rebounds after 4% losses on Friday

Stocks recover from Friday’s slump

U.S. Stocks are jumping higher, recovering from Friday's sell-off, as Trump softened his tone towards China, easing fears of renewed trade tensions between the world's two largest economies.

U.S. stocks had slumped on Friday, with both the S&P500 and the Nasdaq experiencing their largest one-day sell-off since April 10, when Trump initially announced reciprocal trade tariffs.

On Friday, Trump said he would impose a further 100% tariff on China's imports if Beijing continued to curb exports of rare earth elements and equipment. However, there seems to be a de-escalation over the weekend after Trump said that “it would be fine” and he did not want to hurt China.

After substantial communication between the two sides this weekend, the US president is on track to meet his Chinese counterpart in South Korea later this month.

The U.S. economic calendar remains quiet due to the ongoing U.S. government shutdown. Federal Reserve chair Jerome Powell is due to speak tomorrow, which could be a main event given the lack of data. The Q3 earnings season will also kick off tomorrow with banks.

Corporate news

Warner Bros. Discovery has rallied over 4% on reports that it has rejected Paramount Skydance’s proposed buyout of $20 a share.

Rare Earth shares jumped after President Trump threatened China with retaliation over its strict export controls. Sector peers, including Energy Peers and MP materials, also jumped higher.

S&P 500 forecast – technical analysis

The S&P 500 ran into resistance at 6765 before rebounding lower to support at 6500 before recovering higher to 6650. The RSI has recovered above 50. Buyers will look to rise back towards 6780 and fresh record highs. A break below 6500 creates a lower low to 6360.

FX markets – USD rises, EUR/USD falls

The U.S. Dollar is rising to a two-month high, adding to strong gains of 1.2% last week. The dollar is boosted as Trump has softened his tone towards China, and as the NABE economists survey shows the Fed is expected to cut rates just once by the end of this year.

EUR/USD is falling against the U.S. dollar, dropping below 1.16 due to risk aversion and ongoing French political issues. France's new cabinet is expected to be announced after President Macron reappointed Lécornu as Prime Minister one week after his resignation.

The GBP/USD is falling amid a stronger U.S. dollar, and despite Bank of England policymaker Megan Green signalling that she is considering holding rates unchanged until March next year, due to concerns over sticky inflation. Attention will now turn to UK jobs data tomorrow and GDP growth on Friday for further insight into the health of the UK economy.

Oil rises after Friday's 4% decline

Oil prices rebounded on Monday, up 1.5%, recovering some of Friday’s 4% decline after Trump softened his tone towards China.

Last week's oil price meltdown came on the back of a ceasefire in Gaza and the return of US-China trade tensions ahead of the November 10 trade truce deadline.

Also helping oil prices recover from a five-month low was data showing that China's crude imports rose 3.9% in September from a year earlier to 11.5 million barrels a day.

An OPEC monthly report also said that the oil market will see a smaller supply deficit in 2026, even as the OPEC+ group pushes ahead with output rises.

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