S&P 500 Posts Best Week in Two Months With 1.7% Rally

The S&P 500 rose 1.7% last week, its strongest weekly gain since mid-March. The move snapped a stretch of mixed sessions that had left the index roughly flat for the month.

All 11 sectors ended the week higher. Communication services and technology led, while energy and utilities lagged. The rally followed a period of elevated volatility in April, when the index fell as much as 4% from its March peak. Tuesday's CPI print came in below consensus, a fact traders pointed to as the week's main catalyst. The data reinforced expectations that the Federal Reserve's next move will be a rate cut, likely in September.

For the rally to hold, the bond market needs to cooperate. The 10-year Treasury yield ended the week near 3.46%, down from 3.57% the prior Friday. A further decline would support equity valuations, while a bounce back toward 3.60% would test the S&P 500's rebound.

The next major scheduled catalyst is the Fed's June 13-14 meeting, when the committee will update its Summary of Economic Projections. A dot plot that signals two cuts this year would reinforce the current narrative. One that keeps rates on hold for the rest of the year would likely erase this week's gains.

For now, the index sits about 2% below its 50-day moving average, a level that marked resistance in early May. A close above that average would mark a technical shift worth watching. market analysis