S&P500 Forecast: Nvidia Leads Rebound, Indices Eye Fed Clarity and Tariff Risks

Chip Stocks Fuel S&P 500 Rebound as Traders Eye Trade Talks and Technical Levels

U.S. equities turned higher by midday Tuesday, reversing early losses with the S&P 500 futures trading above 5,935. The rebound was powered by chipmakers, particularly Nvidia, and signals that traders may attempt to push the index toward the recent high of 6008.00. The key technical support sits at the 200-day moving average of 5897.09. Optimism around potential trade negotiations and resilient tech momentum helped offset broader market caution.

Are Chipmakers Leading the S&P 500 Toward New Highs?

Nvidia surged over 3%, crossing Microsoft in market capitalization for the first time since January. Broadcom and Micron Technology also gained around 2–3%, while the tech-heavy Nasdaq benefited from a 0.8% lift in the information technology sector. The rally extended to nuclear-linked utilities after Meta announced a power agreement with Constellation Energy, lifting related names like Vistra, GE Vernova, and NuScale Power.

What Role Are Trade Tensions Playing in Market Sentiment?

Investors are watching for developments as President Trump and President Xi are scheduled to speak this week. The U.S. is pushing trading partners for final trade offers by Wednesday, while proposing a controversial tariff hike to 50% on imported steel and aluminum. This stance has drawn EU backlash and weighed on broader market sentiment. Trade uncertainty is curbing risk appetite, contributing to sector divergence with six of eleven S&P sectors in decline. Communication services fell nearly 0.7%.

Is Economic Data Supporting the Rally or Clouding the Outlook?

Tuesday’s release from the OECD revised U.S. growth expectations lower to 1.6%, from 2.2%, citing trade policy risks. Treasury yields fell in response, with the 10-year dipping to 4.418% as investors sought safety. A mixed U.S. jobs report showed increased job openings but also more layoffs, indicating a labor market that’s cooling. Fed officials, including Lisa Cook and Austan Goolsbee, are set to provide more clarity on the central bank’s outlook, while Atlanta Fed’s Bostic reaffirmed his view for one rate cut this year.

What’s the Market Forecast Heading into the Week’s End?

With the S&P 500 less than 4% off its all-time high, momentum is supported by chip sector strength and easing trade rhetoric. But uncertainty around tariffs, Fed policy, and economic data could limit upside until Friday’s jobs report and the upcoming Fed meeting provide clearer signals. For now, traders are watching the 6008.00 resistance and the 5897.09 moving average as key technical guideposts.

More Information in our Economic Calendar.