The devil is in the details—and the U.S. and China haven't provided investors with those details regarding their newly reached deal. This lack of transparency risks cutting off the momentum of S&P 500 bulls. The broad equity index has climbed in six of the last seven trading sessions, fueled by optimistic rumors about the U.S.-China trade talks in London—rumors broadly disseminated by White House officials. Treasury Secretary Scott Bessent described the dialogue as constructive, while Commerce Secretary Howard Latnick claimed the talks were going "very, very well."

According to TS Lombard, markets are stuck in a reflexive cycle in which their calmness prompts U.S. policymakers to find new ways to stir up investors. Indeed, U.S. macroeconomic data has been mixed, Treasury yields have stabilized, and the likelihood of a renewed monetary easing cycle from the Federal Reserve is declining. Derivatives are now pricing in a 45 basis point rate cut by year-end. With that in mind, what else is left to drive the S&P 500 higher other than commentary from White House officials?

Fed Rate Expectations Trend

There is a common belief in the market that China has effectively used its rare earth metals strategy, compelling Washington to make concessions. Meanwhile, the situation in the U.S. is worse than in many other parts of the world. Political uncertainty remains high, inflation risks accelerating, and GDP growth is likely to slow. Unsurprisingly, the S&P 500 is underperforming its international counterparts.

This comes despite individual investors having bought U.S. stocks in 25 of the last 26 weeks, according to a Bank of America survey. Without this retail "crowd," institutional players might have exited long ago. The crowd prefers to listen to optimistic rhetoric rather than analyze hard data—a fact Donald Trump and his team have skillfully exploited to keep the S&P 500 rally alive.

S&P 500 vs. Global Equity Market Performance

The S&P 500 has now returned to levels seen during the inauguration of the 47th U.S. president. It's been a long journey but a necessary one. The rest of the world completed that path much faster: in 2025, international stocks outperformed their American peers—and that trend may continue.

Following the OECD, the World Bank has now also downgraded its U.S. GDP forecast. And significantly so—from +2.8% in 2024 to just +1.4% in 2025. That's a 50% cut. Back in January, the estimate stood at +2.3%. The U.S. has only itself to blame—specifically, the White House's protectionist trade policies. According to the World Bank, if tariffs rise by another 10% from current levels, global GDP would expand by just 1.8% instead of 2.3%.

Technical Outlook

The S&P 500 is quietly approaching resistance at 6060 on the daily chart. A test of this level will determine the broader index's fate. If the index bounces off this level, it may be time to exit long positions initiated from 5945. Further buying would be warranted if it breaks through this key pivot level.