S&P 500 Forecast: SPX Smashes 7,100 as Hormuz Reopening Triggers Peace Dividend Rally

Geopolitical oxygen finally hit the tape this Friday. After weeks of holding their breath over the Strait of Hormuz, traders aggressively exhaled as the strategic waterway completely opened for commercial shipping. This wasn’t just a relief rally; it was a violent repricing of risk that catapulted the S&P 500 to its third consecutive record close, finishing above 7,100. I’m seeing a massive shift in sentiment where the war premium is draining out of crude barrels and flooding directly into risk assets. The Islamabad summit this weekend is the next major hurdle, but for now, the path of least resistance is definitively up.

Oil and Fed Messaging Help the Bullish Case

Yes, the sharp decline in crude oil has been an important driver of Friday’s move. Lower energy prices reduce pressure on transport-heavy and consumer-sensitive sectors, which helps explain the rotation into airlines, cruise operators, and smaller-cap names. At the same time, falling oil has eased some of the inflation anxiety that had been hanging over the market.

Christopher Waller’s latest comments also matter. His argument that labor market breakeven job growth may now be far lower than in the past suggests that softer payroll data may not automatically signal recession. That view could help support equities by giving investors more confidence that a moderation in hiring does not necessarily mean a collapse in demand. The next major variable is the Islamabad summit. A constructive diplomatic outcome would likely keep sentiment supported into the start of the new week.

Weekly Trend Remains Constructive

The weekly chart remains the clearest guide for the medium-term trend, and it looks very constructive. Price has rebounded strongly from the 6,300 corrective floor and has effectively retraced the March-April weakness. That kind of response tells us buyers remain in control of the broader structure.

With the index back above the dual Supertrend bands, the market has re-established a bullish technical backdrop in the medium term. Unless price falls decisively back below the 6,500 swing region, the balance of evidence still favors higher highs over time.

Weekly S&P 500 chart shows a Bullish Trend Reassertion

Weekly candlestick chart of the S&P 500 showing a sharp rebound from the 6,300 area. Source: TradingView

Daily Breakout Confirms Momentum

The daily chart confirms that buyers still control the tape. The S&P 500 pushed through the previous 7,015 resistance area cleanly, turning a former ceiling into what now looks like an important support zone. I’m also watching the 21-day EMA, which continues to act as a useful guide to short-term trend support.

Momentum is undeniably strong, though the RSI in the mid-70s suggests the market is in a zone that could become exhausted. That does not undermine the uptrend, but it does raise the odds of a brief pause, shallow pullback, or consolidation before the next leg higher. A retest of the breakout area would be healthy rather than damaging.

Daily S&P 500 Highlighting ATH Breakout

Daily S&P 500 chart showing price breaking above 7,015 resistance. Source: TradingView

Renko Chart Shows Strong Tactical Control

For me, the 20-brick Renko provides the cleanest short-term tactical view, and it remains bullish. We continue to see a steady sequence of green bricks above the 500-period SMA, which marks deeper structural support if the rally were to unwind more aggressively.

The Z-Score SMA is showing some bearish divergence so we may see a brief pullback, sooner rather than later, near the Supertrend support. But overall the trend is up.

Renko Signals Persistent buying pressure with Initial Bearish Divergence

20-brick traditional Renko chart of the S&P 500 showing a sequence of bullish green bricks. Source: TradingView

Market Outlook

Current Trend Direction: Bullish
Bias: Positive
Key Support Levels: 6,310, 6500, 6,725
Key Resistance Levels: 7,350

Medium Term Path:My base case remains very constructive. I expect the S&P 500 to continue working toward the 7,350 area as long as geopolitical developments remain supportive and the breakout above 7,015 continues to hold. The market looks a bit stretched in the short term, so a pause or sideways reset would not be surprising. Even so, the higher-timeframe breakout remains strong, and for now, pullbacks still look more like buying opportunities than signals of a broader reversal.