S&P 500 Forecast: PPI Softens as Diplomatic Hopes Fuel Near-Term SPX Recovery

Wall Street is continuing to breathe a sigh of relief. Over the last couple of years there seems to be an April sigh for the S&P 500 Index. Peace talks in Pakistan are back on the table, and President Trump says Iran wants a deal. I’m watching the sentiment shift from fear to cautious optimism as the market hunts for an exit strategy from the Middle East conflict. Today’s PPI print added fuel to the fire. It showed producer prices rose less than expected in March, with service costs remaining flat. Inflation might be sticky, but it isn’t accelerating here. The IMF did cut its global growth outlook today, which keeps a lid on any excessive exuberance. We’re in a “wait and see” mode. But the bulls have the ball.

PPI Data Signals Inflation Stabilization

The March PPI reading showed a 0.5% monthly increase, which was softer than the 1.2% market forecast. Looking at the chart, we’ve seen a steady decline in the velocity of producer price increases since the peak in early 2026. This data gives the Fed some breathing room. They don’t have to be quite as aggressive. If services stay flat, the narrative of a “soft landing” remains alive. It’s a goldilocks number for equity bulls.

Producer prices cooled in March

Bar chart comparing US monthly PPI actual percentages against forecasts. Source: TradingView

Weekly Squeeze Attacks Resistance

Macro support is holding. The weekly timeframe reveals an Index that refused to break down during the height of the blockade news. Price is currently pushing away from the Supertrend support near 6,500.8. Sellers are trapped. We’ve seen a consistent bid emerge every time the Index tests the lower boundary of this consolidation range. The path toward 7,100 is still blocked by heavy supply. But the underlying structure is undeniably resilient. I expect more grinding. Higher.

Bulls Defended the 6,500 Floor

Weekly S&P 500 candlestick chart highlighting price action. Source: TradingView 

Daily 21-EMA Flips to Dynamic Support

Bulls took the wheel. The daily chart carved out a sharp recovery directly off the 6,311 structural pivot. We’re now trading back above the 21-EMA. It served as a ceiling for most of March. That’s a trend change! The RSI has cleared the 50 level and is pointing higher. It suggests the recent sell-off was likely a liquidity grab rather than a cycle top. I like the setup. We need to hold 6,700 to keep this impulse alive. Don’t chase the gap.

The Index Reclaims the 21-EMA as Momentum Shifts

Daily S&P 500 chart showing price action carving a V-shaped recovery and crossing back above the 21-EMA. Source: TradingView

Renko Bulls Shatter 500-SMA Resistance

The tape is clean. Analyzing the 20-brick traditional Renko exposes a rigid sequence of green bricks that just triggered a fresh Supertrend buy signal. We’ve cleared the 500-SMA. This level capped every rally since the war started. Momentum is constructive. The Z-Score has pushed into positive territory at 2.1. This confirms that buyers are paying up for exposure right now. It looks like a classic short-squeeze. Bears are covering. We target 7,014.

SPX Renko Clears the 500-SMA

S&P 500 Renko chart with 20-brick size displaying a clear sequence of green bricks breaking above the 500-SMA. Source: TradingView

The Verdict

Current Trend Direction: Neutral

Bias: Positive

Key Support Levels: 6,310, 6,500

Key Resistance Levels: 7,015

Medium Term Path: I expect the S&P 500 to grind higher toward the 7,015 all-time high, provided the 21-EMA holds on a daily closing basis. The soft PPI data and the Pakistani diplomatic efforts have removed the immediate worst-case tail risks. We’ll likely see some volatility around the April 21 ceasefire deadline. But the technical breakout on the Renko and Daily charts suggests the path of least resistance is currently up. Buy the dips.