- The S&P 500 extends its rally, breaking key levels as optimism pushes the index higher.
- Momentum remains strong, with 6,200 points as the next potential target.
- On the flip side, watch support at 5,770 and 5,670 points—breaks could signal a trend shift.
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U.S. stocks rose on Thursday, with the S&P 500 clinching a fresh record close, as investors closely tracked President Donald Trump’s speech at the World Economic Forum in Davos. Optimism dominated Wall Street, fueled by earnings season momentum and the market's favorable interpretation of Trump’s remarks.
In the weeks leading up to the inauguration, markets grappled with uncertainty over how the new administration’s policies would unfold. While Trump has issued several executive orders, the absence of concrete details on tariffs - coupled with a focus on familiar campaign rhetoric - seems to have calmed investors' nerves, keeping markets buoyant.
Currently, demand outpaces supply across major indexes, and the market's upward momentum looks set to extend into next week. Corporate earnings are playing a vital role, with many companies delivering results that exceed expectations. The coming week will be critical, as five of the seven firms in the "magnificent seven" are set to release their quarterly earnings.
Indexes Looking to Close Week on a High
The S&P 500 rose over 0.5% to secure its first all-time closing high of 2025, reflecting the broad market’s strength. The Dow Jones Industrial Average added nearly 0.9%, falling just short of its own record, while the Nasdaq 100 reversed earlier losses to finish up 0.2%.
Looking ahead, futures on U.S. indexes are slightly in the red as traders gear up for Friday’s session.
S&P 500 Powers Ahead with New Momentum
The S&P 500’s latest rally signals unwavering bullish sentiment, with the index breaking past 6,100 points. If this momentum holds, the next target for buyers is the round number of 6,200 points.
However, bulls should remain vigilant. Support levels at 5,770 and 5,670 points serve as key defenses; any break below these could signal a shift in the trend.
Nasdaq 100 Targets Fresh Peaks
The Nasdaq 100 is poised for another test of its recent highs at the 22,400-point level, following an upward breakout from its corrective price channel. Next week’s earnings reports from tech giants could be the catalyst that propels the index to new records.
In the short term, traders are eyeing the 22,000-point level—a psychological barrier and local supply zone. A decisive move above this threshold could pave the way for an attack on the all-time highs.
DAX: Buy-the-Dip Strategy Still in Play
The DAX continues its methodical march higher, with a steady rhythm of impulses and pullbacks. Buyers remain firmly in control, and the strategy of buying on corrections remains effective. Key support zones at 20,500 and 19,700 points offer opportunities for traders to re-enter at favorable prices.
A trend reversal would require a break below the main uptrend line and the critical 19,000-point level, which would serve as a warning for bulls.
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