S&P 500 Forecast: Mixed US Data and Renko Support Keep Bulls in Control

Published: May 21, 2026

Key Points

• US macroeconomic data shows mixed results but remains broadly supportive.
• Building permits and housing starts exceeded forecasts, indicating resilience in the housing market.
• The manufacturing sector is struggling, highlighted by a significant drop in the Philly Fed Index.
• Technical indicators suggest a bullish trend for the S&P 500, but confirmation is needed.

US Building Permits Beat Forecasts

In May 2026, US building permits rose to 1.44 million, surpassing the forecast of 1.39 million and the previous level of 1.36 million. This indicates that builders are maintaining confidence in future construction plans.

US Housing Starts Beat Forecasts, But Momentum Cools

Housing starts also exceeded expectations, coming in at 1.47 million compared to the forecast of 1.41 million. However, this figure represents a slight decline from the prior reading of 1.51 million, suggesting some cooling in the housing market.

Philly Fed Manufacturing Slumps Into Contraction

The Philadelphia Fed Index fell sharply to -0.4, missing the forecast of 18 and down from a previous reading of 26.7. This drop indicates a contraction in manufacturing, raising concerns about the momentum in cyclicals, industrials, and materials.

US Composite PMI Holds In Expansion Territory

The S&P Global Composite PMI Flash for May 2026 was reported at 51.7, indicating modest growth in business activity across services and manufacturing, remaining above the 50 threshold that separates expansion from contraction.

S&P 500 Renko Chart: Bulls Pause Above 50-SMA Support

The S&P 500 Index is currently fluctuating between the 50-SMA and resistance levels. The Renko chart shows that while the index is above the 50-SMA, a positive Supertrend flip is needed to confirm a bullish move.

The Verdict

Current Trend Direction: Bullish

Bias: Positive

Support Levels: 7,240, 6,775

Resistance Levels: 7,450, 8,150

The S&P 500 is expected to trend higher in the medium term, but further confirmation is required. The market breadth indicators are showing positive signs, suggesting a gradual recovery.

Author

Cedric Thompson, CMT, CFA, is an investment strategist with experience in asset management, corporate strategy, and multi-asset investing.