During the Friday trading session, markets were running on optimism, but it didn't last that long though. There were talks that China is reopening, which ignited the bulls to take positions in the SPX once again. China is the 2nd largest economy, and as such, it has the potential to boost global demand once again.
However, there's also another side which claims that the reopening of China will eventually increase inflation. As a result, the S&P 500 index continued to remain in a push-pull situation. In the end, another report appeared that stated that China is not yet ready to ditch its zero COVID policy.
A few days ago, news related to Apple also added pressure to the S&P 500 index. The news stated that Apple's iPhone 14 shipments would decline due to the COVID restrictions in mainland China.
As a result, the shipments of iPhone 14 models will be delayed, which means that customers will have to wait longer. In case you do not know, the assembly facility for iPhone 14 is located in Zhengzhou (China).
Analysts believe that equity markets are signalling a positive setup if we look at the historical price movements. That's why after we are done with the mid-term elections in the USA, the bias for stocks will be towards the upside, at least for the next 3 months. That's one of the reasons why the US stocks are not going through a serious bearish meltdown right now.
In fact, even the hawkish policy from Fed also didn't have much of an impact on the equities, which is further reassuring.
For now, it seems that S&P 500 is looking to test resistance at 3806 once again, and if it fails, we will see another leg down in the US index. Furthermore, the results of the US tech companies are also not looking good, which could further pressure the S&P 500 index.