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S&P 500 Weekly Market Insights - Week of May 4th

  • Writer: Mike
    Mike
  • May 3
  • 4 min read

Market Analysis for S&P 500 for the Week of May 4th, 2025


Overview:


the S&P 500 is entering the week of May 4th with cautious optimism following a volatile April and a strong recovery in late April. The SPDR S&P 500 ETF (SPY) is trading at 566.76 USD, per real-time data, up from a mid-April low of 481.80 USD, reflecting a significant rebound driven by positive U.S.-China trade talk developments and robust corporate earnings. However, tariff uncertainty, mixed macroeconomic signals, and upcoming economic data (e.g., employment, PMI) continue to pose risks. Posts on X and recent reports indicate a market poised for potential upside if trade tensions ease, but with downside risks if supports fail or policy clarity falters.


Technical Analysis:

  • S&P Futures (ES_F) Key Price Levels:

    • Resistance Levels:

      • 5,700 (immediate resistance, aligning with SPY’s recent highs around 568.38 USD adjusted for futures, as seen on May 2nd)

      • 5,775 (strong resistance, corresponds to SPY’s prior consolidation near 573-576 USD in late March, per Yahoo Finance)

      • 5,850 (major resistance, a critical level to reclaim for bullish momentum, near SPY’s year-high of 613.23 USD in February)

    • Support Levels: 

      • 5,600 (key near-term support, slightly below SPY’s current price of 566.76 USD and May 2nd low of 562.38 USD)

      • 5,500 (potential support, aligning with SPY’s late April levels around 550-551 USD, as seen on April 25th at 551.23 USD)

      • 5,400 (deeper correction level if breached, near SPY’s mid-April low of 534.29 USD on April 11th)

      • 5,300 (significant downside target if selling resumes, near SPY’s early April low of 505.5 USD on April 4th)

    • Pivots: 

      • Weekly Pivot around 5,650, based on SPY’s May 2nd metrics (high 568.38 USD, low 562.38 USD, close 566.76 USD), adjusted for futures.


    Entering the week of May 4th, ES_F likely starts near 5,600-5,650, reflecting SPY’s current price of 566.76 USD, up from 558.47 USD on May 1st, indicating sustained bullish momentum. Posts on X suggest ES_F hit 5,562 on April 25th, with traders targeting 5,595-5,775 if bulls hold above 5,601, though a bearish target of 5,520 exists below 5,601. The RSI (~50-55) is recovering from oversold conditions, supporting a potential relief rally, but a break below 5,600 could signal a pullback toward 5,400-5,300, per trader warnings on X.


  • Elliott Wave & Trend Analysis:

    • The S&P 500 is likely transitioning from a corrective wave (from a February peak near 6,240) to a potential recovery phase. A move above 5,700 could confirm a rally targeting 5,775-5,850, driven by trade optimism and earnings strength. Conversely, a drop below 5,600 might resume the corrective phase, with 5,300 as a downside target, reflecting tariff-driven risk-off sentiment, as noted by Reuters’ report of a 10.5% two-day loss in early April.


Fundamental Outlook:

  • Earnings Season: 

    • Q1 earnings from S&P 500 companies have been robust, with Microsoft (+9% on Q3 sales beat) and Meta (+6% on Q1 sales beat) driving gains, per Barchart on March 27th. Alphabet’s 5% jump on April 25th after a Q1 earnings beat further bolstered sentiment. However, consumer staples lag, with McDonald’s reporting a 3.6% U.S. sales drop, signaling consumer pullback. Upcoming earnings could sustain the rally if positive, but tariff-related cost concerns for industrials and retail pose risks, as noted by CNBC.

  • Policy and Economic Indicators: 

    • Tariff uncertainty has driven volatility, with a 90-day tariff pause in mid-April sparking a 5.7% weekly S&P 500 gain. Recent optimism around U.S.-China trade talks, reported on May 2nd, has fueled a 3% weekly gain, with Investing.com noting strong futures performance. However, China’s 125% retaliatory levy on U.S. goods remains a concern. This week’s employment and PMI data are critical, with strong April jobs data (177,000 nonfarm payrolls) pushing Fed rate cut expectations to July, per CNBC. Weak PMI or renewed tariff fears could trigger selling, as warned by Goldman Sachs’ forecast of 3.5% core inflation in 2025.

  • Market Sentiment: 

    • Sentiment on X is cautiously bullish, with traders noting the S&P 500’s RSI at 23.51 in late April as oversold, supporting a reflexive rally. Posts highlight ES_F’s potential breakout above 5,682 targeting 5,763, though a drop below 5,601 could hit 5,520. The VIX (~25.11, down from 48.05 in April) suggests stabilizing volatility, but persistent uncertainty remains, with traders split between upside targets of 5,685-5,750 and downside risks to 5,479.


Options Chain Data for SPY ETF:

  • Call Options: 

    • High open interest at strike prices of 570 and 575, reflecting expectations of a rally toward ES_F 5,700-5,775 (SPY ~570-575 USD) if bullish momentum persists. These strikes are near the money given SPY’s current 566.76 USD price and align with X sentiment targeting 568.5-575 USD if SPY holds above 563 USD. Traders on X note active call buying at 565-568, anticipating a move to 570 if 566.76 USD holds.

    • Max pain for SPY options expiring May 16th is estimated at 560 USD (ES_F ~5,600), suggesting a slight buffer below the current price, per X sentiment.

  • Put Options: 

    • Significant open interest at 560 and 555, aligning with ES_F support around 5,500-5,400 (SPY ~560-555 USD). These levels likely saw increased activity as hedges or bearish bets during the April correction, with X posts noting 543.69 USD (April 25th low) as a critical hold zone and 481.80 USD (year-low) as a deeper target. Put activity at 550 USD reflects concerns about a retest of late April lows if trade talks falter, per X sentiment.

  • Volatility: 

    • Implied volatility for SPY options remains elevated, reflecting uncertainty after the April sell-off, with the VIX at ~25.11 indicating stabilizing but cautious sentiment. Posts on X note high put/call ratios but a softening bearish bias, with traders anticipating a potential reversal if supports hold, supported by a declining VIX from its April peak of 48.05.


Conclusion:


For the week of May 4th, 2025, the S&P 500 is at a pivotal juncture with ES_F starting near 5,600-5,650, reflecting SPY’s current price of 566.76 USD. A break above 5,700 could drive a rally toward 5,775-5,850, supported by call option interest at 570-575 for SPY, potentially fueled by positive trade talk developments, strong earnings, or favorable economic data. However, if support at 5,600 fails, a correction toward 5,400-5,300 could unfold, aligning with put option interest at 560-555 and X sentiment marking 543.69 USD as a key threshold, with 481.80 USD as a deeper target. The options market and posts on X reflect a cautiously bullish landscape, with traders balancing recovery expectations against downside risks amid tariff uncertainty. Investors should closely monitor these technical levels, alongside policy updates and economic indicators, to navigate the week effectively.

 
 
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