The S&P 500 emerged from last week’s volatility without breaching the technical levels that would have signaled a more significant deterioration in market momentum. After falling as much as 4% from its August peaks and briefly moving below its 50-day moving average, the benchmark recovered above that level, leaving investors assessing whether the recent pullback has stabilized enough to support another attempt at record highs.

50-Day Average Becomes the First Technical Test

Moving averages are closely watched by technical analysts because they smooth short-term price fluctuations and can provide a clearer indication of an underlying trend. The S&P 500’s move below its 50-day moving average last week raised concerns that momentum was weakening, particularly as the index approached its 100-day average following the Federal Reserve’s latest interest-rate increase.

However, the index held above the 100-day average before recovering back above the 50-day measure. Reuters’ technical analysis indicates that these averages can now serve as potential support levels, meaning areas where market participants could become more willing to step in if prices retreat.

7,677 Level Matters for a Renewed Uptrend

The next technical hurdle is the S&P 500’s 7,677.02 intraday high from September 11. A sustained move above that level would indicate that the downward momentum from the August record highs is weakening. The next resistance zone is identified between 7,756 and 7,772, placing the index close to the area where it previously encountered selling pressure.

The broader market backdrop has also improved since last week’s volatility. On Monday, the S&P 500 gained 1.49% to 7,764.70, finishing about 0.4% below its August 13 record-high close. The Nasdaq gained 2.26% to reach a record close as AI-related shares and semiconductor companies rallied, while the 10-year Treasury yield fell below 5%.

8,000 Becomes a Longer-Term Technical Objective

If the S&P 500 can push through its 7,816.70 August 14 intraday record, Reuters’ technical analysis identifies the psychologically important 8,000 level as the next potential objective. Such a move would require the index to overcome several layers of resistance, making the sequence of technical levels more important than any single daily gain.

The fundamental backdrop remains less straightforward. The Federal Reserve raised interest rates last week and left markets anticipating further tightening, with traders assigning roughly a 50% probability to another increase in October. At the same time, renewed AI optimism has supported earnings expectations and technology valuations, while lower oil prices and retreating Treasury yields have temporarily reduced two sources of pressure on equities.

Downside Levels Remain Important

The technical structure would become less constructive if the S&P 500 falls back below the 50-day moving average, identified near 7,617. Below that level, the rising 100-day average near 7,520 and the September 17 intraday low of 7,507.7 become important areas of support.

A decisive break below those levels could shift attention toward the 7,237–7,314 range, corresponding with June and July lows, and toward the rising 200-day moving average near 7,183. A decline to those levels would represent a drop of approximately 6% to 8% from the index’s record highs.

The coming sessions will therefore provide an important test of whether Monday’s rebound represents a continuation of the broader advance or simply a temporary recovery from last week’s weakness. Investors will be watching 7,677, 7,756–7,772 and 7,816.70 on the upside, while 7,617 and 7,507.7 remain important downside reference points. The technical signals will continue to interact with interest-rate expectations, Treasury yields, corporate earnings and AI-related spending as markets assess the next phase of the equity cycle.