The S&P 500 Index has shown significant volatility recently. During the week of June 13, the index fell 0.39%, ending its four consecutive
weeks of gains. Specifically, on Friday, June 13, the index closed down 1.13% amid escalating Iran-Israel conflict, dropping below the key
6,000 level to 5,976.97. However, on Monday, June 16, the market rebounded quickly, closing up 0.94% at 6,033.11 and reclaiming the 6,000
mark.
Source: TradingView
From a drivers’ perspective, the escalation of Middle East tensions has been a key factor behind the recent market fluctuations. Multiple
explosions were reported in Iran’s capital, Tehran, while Israel continued strikes against Iranian targets, sending WTI crude above $70.
Nevertheless, as the conflict has not directly affected Middle Eastern oil production and exports, oil prices subsequently fell back, easing
investor concerns about energy-related inflation.
Additionally, the US and UK struck a trade deal on June 16, which also supported market sentiment. The agreement, involving tariff
adjustments on key sectors such as autos and steel, provided a short-term boost to manufacturing and aerospace stocks.
Technical View
Despite S&P 500 Reclaiming Key Levels, Technical Indicators Still Look Fragile
From a technical perspective, the S&P 500 is currently in a key position and broadly trading in a consolidation pattern. Although the index fell
below its uptrend line from early May (around 5,960) on June 13, it remained above the weekly gap formed in early May (between 5,880 and
5,920), indicating that the overall trend has not undergone a major reversal. This suggests that the 5,960 area has become a key short-term
technical support; if it fails, the pullback may deepen.
Source: TradingView
In the near term, the 6,000 level has become a battleground for bulls and bears. Currently, resistance is concentrated in the 6,100–6,120
range, near the historical high from February — a area that has been repeatedly tested in recent weeks but not decisively broken. If the
index successfully settles above 6,120, it may resume its upward trend and challenge 6,200 or even a new all-time high.
Source: TradingView
The volatility index (VIX) is worth close observation. Last Wednesday, the VIX fell to a local low of 16.23, but by Friday it surged to 22 amid
escalating geopolitical risks. Historical data shows that a VIX range of 20–25 typically signals a medium-risk environment for markets, while
a break above 25 may indicate a rise in short-term panic.
The current rebound in the VIX reflects investor worries over geopolitical tensions and policy uncertainty, although it has not yet crossed the
threshold for a systematic selloff. As of press time, the VIX has retreated back below 20, reflecting a slight easing of market concerns over
near-term geopolitical risks.
Source: TradingView
Event Risk Factors
Geopolitical Risk Still Main Market Variable; Fed and Economic Data in Focus.
Geopolitical risk remains the greatest variable affecting the market. Iran has warned it will take “more painful” retaliatory measures if the USA
fails to intervene in Israel’s actions. Such geopolitical tensions add uncertainty to the overall outlook and contribute to greater index volatility.
Additionally, Wednesday’s FOMC policy decision will serve as a key indicator for future market direction. If the Fed signals a dovish shift, risk
assets may find support; if its tone turns more hawkish, it could weigh on the index.
Meanwhile, a series of US economic reports — including Retail Sales and Producer Price Index (PPI) — are due this week. Strong data may
dampen rate cut expectations and, alongside geopolitical risks, create additional pressure on stocks.
If geopolitical tensions do not escalate and the Fed maintains a dovish policy bias, the index may absorb these risks and move back toward
the 6,100 area, or even reach a new high. However, if tensions worsen or the Fed turns more hawkish, the pullback may deepen, possibly
testing the 5,900 or even 5,880 level.
Source: TradingView
