S&P 500 Trading Levels As Inflation Fears Mount

The S&P 500 is hovering just below all-time highs, navigating growing concerns about inflation and tariffs. The critical resistance level to watch remains the December 2024 peak of 6,100; a decisive break above this point could signal the next leg up in the bull market. Investor sentiment remains largely positive, fueled by hopes that deregulation, a robust job market (despite recent signals), and excitement surrounding AI will extend the current rally.

However, caution is warranted. Recent jobs data suggests a potential softening in the labor market, while rising hourly earnings pose an inflationary risk. A successful breach of the 6,100 resistance could open the door to further upside, with the next target around 6,325. Conversely, a significant downturn could find initial support near 5,900.

The bull market's fate hinges on two key factors: taming or reducing inflation, and maintaining sufficient economic strength to support consumer spending. If either of these pillars weakens, particularly given current high stock valuations, the market could experience a substantial correction.