S&P 500 Bulls Breaking 7,175 as GDP, Core PCE and AI Momentum Support A May Rally

Published: April 30, 2026

Author: Cedric Thompson

Key Points

• The S&P 500 Index is showing positive momentum, nearing 7,200 after a strong rebound in April.
• Macro data indicates a cooling economy with 2.0% GDP growth and 0.3% Core PCE, suggesting no immediate recession risk.
• AI-driven stocks like Qualcomm (QCOM), Teradyne Inc. (TER), and Quanta Services, Inc. (PWR) are leading the rally, offsetting inflation and geopolitical risks.
• Key support level for the index is at 6,920.

Market Overview

The S&P 500 Index is concluding April on a high note, with an increase of over 12% following a challenging March. The index is currently positioned around 7,200, reflecting a robust recovery.

In the last five trading days, the index has gained over 0.75%, with notable performances from stocks such as Qualcomm, which is expanding into the AI data center chip market. This strategic shift aims to diversify revenue streams and enhance competitiveness in large-scale AI computing.

Economic Indicators

The recent economic data shows that the US GDP growth rate is at 2% quarter-over-quarter, slightly below the forecast of 2.3%. The Core PCE index rose by 0.3% month-over-month, aligning with expectations. These figures suggest that the economy is not overheating, which may prevent the Federal Reserve from adopting a more aggressive monetary policy.

Despite geopolitical tensions, the GDP figures did not decline significantly, indicating resilience in the economy. The current macroeconomic environment supports traders' earnings expectations without necessitating a rate hike from the Fed.

Technical Analysis

The S&P 500's Renko chart indicates a strong finish for April, with a rally towards 7,200. The Supertrend indicator has turned positive, and the RSI is approaching the 60 mark, suggesting continued positive momentum. The Z-Score SMA indicates that there is still potential for further gains.

Support levels are identified at 6,310 and 6,920, while resistance levels are at 7,450 and 8,150. A sustained move above 7,200 could propel the index towards 7,450, supported by a favorable macro backdrop and ongoing AI leadership.

Conclusion

The current trend for the S&P 500 is bullish, with a positive bias and a clear path for further upside in May. However, a break below the 6,920 support level could negate this optimistic outlook. With volatility remaining low, as indicated by the VIX being below 20, significant downward movements in the short to medium term appear unlikely.