Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

S&P 500 RALLY HITS NEW HIGHS, BUT CRACKS EMERGE BENEATH THE SURFACE

Since the late-March lows, the equity market has been on an impressive run. Still, under the surface, unease is growing. Many traders are starting to wonder whether the rally is getting a bit stretched, especially as some internal indicators hint that all may not be as strong as the headline numbers suggest.

On Thursday, the S&P 500 .SPX closed at 7,501.24, finally breaking above the 7,500 mark for the first time. That also marked its 18th record close of 2026 -- and, perhaps more strikingly, 14 of those record finishes have come just over the past month. Since the week ending March 27, the index has climbed nearly 18% and is now on pace for a seventh consecutive weekly gain. If it gets there, it would mark its longest winning streak since a nine-week run that ended in December 2023, and the strongest seven-week rally since May 2020, when markets were rebounding sharply from pandemic lows.

Even with those gains, signs of divergence are emerging. The S&P 500 continues to notch new highs, but its cumulative daily Advance-Decline Line -- which tracks how many stocks are rising versus falling -- has not kept pace.

That kind of divergence can point to weakening breadth, meaning fewer stocks are actually driving the rally.

Near-term pressures are building. Futures are sharply lower on Friday, with the AI-driven momentum trade showing signs of cooling as Treasury yields jump. Rising yields -- driven in part by inflation concerns tied to tensions in the Middle East -- are starting to weigh on sentiment.

From a technical standpoint, traders are focused on weekly Gann lines -- tools that map relationships between price and time to help identify support, resistance, and potential turning points. After breaking above a Gann line capping gains since late 2024, that level is now expected to act as support.

It sits near 7,320 and edges up toward 7,335 next week. Notably, that aligns closely with a key long-term projection -- 11 times the March 2009 low -- at 7,334.69, a level the index briefly tested earlier this week.

If the S&P 500 breaks back below that zone on a weekly basis, it could signal a deeper pullback, with 7,000 as the next major support. On the upside, a push above Thursday’s intraday high of 7,517.12 would keep the rally intact, opening the door to Gann resistance near 7,750 -- and potentially the 8,000 area beyond.

(Terence Gabriel)

*****

EARLIER ON LIVE MARKETS:

AN EXTREME WAR SCENARIO CLICK HERE

INVESTORS MAY START BUYING JGBs - CITI CLICK HERE

CHINA'S GRIP ON SUPPLY CHAINS: NOT JUST RARE EARTHS CLICK HERE

TECH AND BANKS DRAG ON STOXX AS INFLATION FEARS RESURFACE CLICK HERE

EUROPE BEFORE THE BELL: INFLATION WORRIES SINK FUTURES CLICK HERE

YIELD SURGE SPOILS THE EQUITY PARTY CLICK HERE