S&P 500 Faces Trendline Support Test Ahead of NVIDIA Earnings Report

Market Overview

U.S. equity markets remain under pressure as investors brace for a series of key corporate earnings reports this week, with NVIDIA (NVDA) being the primary focus. The S&P 500 (SPX) closed Tuesday’s session down 0.5%, extending its recent corrective move following a softer-than-expected U.S. economic report. The decline in equities was primarily driven by a weaker U.S. Consumer Confidence Index, which fell to its lowest level since the pandemic, raising concerns over consumer spending.

Meanwhile, the Nasdaq Composite fell by 1.4%, weighed down by the tech sector, while the Dow Jones Industrial Average (DJIA) managed a 0.4% gain, supported by defensive stocks.

Technical Analysis

The S&P 500 has been in a strong uptrend, reaching a record high of 6,150.49 before entering a pullback phase. Despite the recent weakness, the index remains within its long-term bullish structure, holding above the rising trendline support.

On Tuesday, sellers tested the key support level at 5,911.54, which coincides with the ascending trendline. If this support breaks decisively, a deeper correction toward 5,846.55 and 5,763.87 could follow. The RSI has turned lower, confirming fading momentum, while the MACD histogram remains in negative territory, suggesting that the bearish pressure persists.

However, if buyers defend the trendline, the index could stage a rebound. A sustained move above 6,002.82 would indicate renewed bullish momentum, setting the stage for a retest of the record high at 6,150.49.

Key Technical Levels

• Resistance Levels: 6,002.82, 6,150.49
• Support Levels: 5,911.54, 5,846.55, 5,763.87, 5,672.59

Fundamental Drivers

The market is closely watching NVIDIA’s earnings release, which has the potential to impact sentiment across the broader technology sector. With AI stocks driving market momentum, a strong earnings report from NVIDIA could fuel a relief rally. Conversely, any disappointment could accelerate the ongoing correction in equities.

Beyond earnings, economic data releases remain in focus. The U.S. housing market report, due later today, will provide insight into real estate demand, while Friday’s Core PCE Price Index—the Federal Reserve’s preferred inflation gauge—is expected to shape rate expectations. If inflation remains elevated, it could reinforce a hawkish Fed outlook, further weighing on equities.

Conclusion

The S&P 500 is testing its ascending trendline support at 5,911.54, a crucial level that will determine the short-term market direction. If buyers hold this level, a rebound toward 6,002.82 and 6,150.49 could materialize. However, a break below support would expose the index to deeper downside risks. Investors remain focused on NVIDIA’s earnings and upcoming economic reports, which will be key drivers of market sentiment.

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