Global and U.S. stock markets ended last week on a strong note, supported by solid April job data, better-than-expected corporate earnings, and signs of easing trade tensions. The S&P 500 extended its rally with a ninth consecutive daily gain, marking an impressive winning streak.

This week, investor focus shifts to the Federal Reserve’s policy meeting and ongoing U.S.-China trade developments—both of which could significantly influence market sentiment.

Fed Meeting & Trade Tensions in Focus

The Fed is widely expected to keep rates unchanged. However, markets will closely watch for any forward guidance on potential rate cuts. With inflation showing signs of easing and April’s job report remaining strong, the Fed may appear more comfortable with the idea of rate cuts later this year. Hints of earlier or more aggressive easing could support further gains in equities.

On the other hand, a more cautious or hawkish Fed stance—possibly signaling delays in cuts—may dampen the current risk-on sentiment.

Meanwhile, despite recent signs of easing, U.S.-China trade tensions continue to linger. A lack of concrete progress keeps markets sensitive to headlines, and any unexpected developments could trigger sharp reactions across global assets.

Technical Outlook: SPX500, XAUUSD, US Dollar

Global markets continue to ride a wave of optimism, pushing the SPX500 to nine consecutive days of gains. In contrast, safe-haven assets like gold (XAUUSD) have seen a corrective pullback, while the US Dollar remains range-bound. These assets are poised for sharp moves should market sentiment shift—particularly with upcoming central bank decisions and trade headlines.

SPX500: To Challenge the 200-days Average Resistance

The SPX500 rally has paused near the key 200-day moving average and the 5,700 level—an area that previously triggered a sharp sell-off in April. 

This resistance zone could invite near-term selling pressure, especially if market sentiment shifts. A more hawkish tone from the Fed or renewed concerns over US-China trade tensions could trigger a pullback in equities.

Gold: Corrective Move Holds Key Support Zone

Gold has entered a corrective phase over the past two weeks as safe-haven demand eased amid improving market sentiment. The price appears to be stabilizing near the $3,200 level—a key support zone from the April breakout. Fibonacci analysis also points to the 61.8% retracement near $3,172 as an important support.

If this zone holds, gold may enter a range-bound phase between $3,200 and $3,270. A sustained break above $3,270 could signal a resumption of the broader bullish trend.

US Dollar Index: Pending Breakout near 100-point

The US Dollar Index remains in consolidation, trading between the key 100.20–99.30 range. This zone continues to act as a critical setup area, with a breakout likely to determine the next major trend. A move above 100.20 could confirm a bullish reversal, while a break below 99.30 may signal further downside.

With the upcoming FOMC meeting in focus, traders should closely watch for a directional breakout that could define the dollar’s next move.