S&P 500 Analysis: SPX Ends the Week with Positive Momentum

By Julian Pineda, CFA, CMT – Market Analyst

Date: July 31, 2026

Overview

The S&P 500 index has shown a new bullish bias, gaining 2.00% over the last two sessions, primarily driven by positive corporate earnings that have bolstered short-term market confidence. However, uncertainty regarding future Federal Reserve actions may pose risks to this momentum.

Earnings Help Support Confidence

The earnings season began with some concerns, particularly after Alphabet's warnings about high artificial intelligence expenditures. However, the sentiment shifted positively towards the end of the week, thanks to strong earnings reports from major companies like Amazon and Microsoft.

Microsoft reported a revenue of $90 billion, an 18% year-over-year growth, with earnings per share of $4.74, exceeding expectations. Notably, revenue from Azure and other cloud services surged over 43%, reinforcing confidence in its financial stability.

Amazon also delivered impressive results, with earnings per share of $1.97, surpassing the expected $1.82, and revenue exceeding $200 billion. The growth of AWS was particularly noteworthy, increasing 37% year-over-year to $42.2 billion, marking the fastest growth rate in 18 quarters.

These results alleviated concerns regarding the impact of AI spending on major U.S. companies, leading to a broadly positive performance in the S&P 500, despite some weakness from Apple following its earnings release.

Market Activity and Futures

Following the positive earnings, trading activity in S&P 500 futures increased significantly, with E-mini S&P 500 futures trading volume surpassing 1.7 million contracts. Open Interest also rose above 2 million, indicating a solid market activity and potential new buying positions.

Fed Announcements Ease Tensions

The Federal Reserve's decision to maintain interest rates in the 3.75% range and its lack of urgency for future rate hikes helped ease market tensions. This reduced the appeal of dollar-denominated investments, reflected in the DXY index, which showed a decline, indicating weaker short-term demand for the dollar.

Sustained dollar weakness could lower demand for safe-haven assets and stabilize U.S. consumption, which would be beneficial for corporate sales and the equity market. However, any signals of potential rate hikes in September could reverse this trend and pressure the S&P 500.

S&P 500 Technical Forecast

The S&P 500 has been trading within a sideways range, with resistance near 7,600 points and support around 7,300 points. Recent price movements have not been strong enough to break out of this range, indicating ongoing indecision in the market.

Key levels to watch include:

• 7,600 points: Major resistance level, corresponding to all-time highs.
• 7,450 points: Near-term barrier, acting as a neutral zone.
• 7,300 points: Key support level, with sustained moves below this indicating potential downside pressure.

Conclusion

While recent earnings reports have provided a boost to the S&P 500, the market remains cautious due to potential uncertainties surrounding the Federal Reserve's future actions and upcoming earnings reports from other significant companies. Continued positive earnings could strengthen buying pressure, while any signs of weakness may lead to a return to indecision in the market.