The ongoing U.S. stock market rally, which has seen the S&P 500 reach a record high near 6,300, could be approaching a turning point, according to Gareth Soloway, Chief Market Strategist at Verified Investing.
Based on technical analysis and weakening reactions to bullish news, Soloway believes the current rally may mark the “beginning of the end,” he said during an interview with David Lin published on July 15.
In his analysis, Soloway identified major trend lines on the S&P 500 chart that converge at a critical resistance point.
While a sharp breakdown hasn’t occurred yet, the strategist noted that the S&P 500 is sitting right at a key uptrend line that began in April, when the index was down roughly 20% from its highs.
This trend line, anchored to the April 7 low triggered by uncertainty around trade tensions, serves as a critical support level.
He noted that while the S&P 500 initially rallied, it quickly pulled back despite strong catalysts such as Nvidia (NASDAQ: NVDA) gaining approval to sell its advanced AI chips to China.
Nvidia surged 5% on the news, but the broader market failed to follow through, ending the July 15 session in negative territory. As of press time, the S&P 500 was trading at 6,263, up 0.3%.
This market behavior, according to Soloway, signals a potential weakening in bullish momentum.
“For the stock market, this is the beginning of the end. <…> When you start seeing good news and the stock market is not pushing up, not only are the technical lines right above the current price, but now we’re starting to see the fundamental positives not have as big an impact on the market,” Soloway said.
What’s next for S&P 500
If the S&P 500 closes below approximately 6,265, it could trigger algorithmic and institutional selling, putting additional pressure on retail investors and potentially ending the current uptrend.
For now, the market is teetering on the edge, with experts emphasizing the importance of closely monitoring this level, as a confirmed break could mark the start of a broader sell-off.
Notably, Soloway’s outlook comes at a time when recession fears have waned in recent weeks, as the United States moves to secure new trade deals; however, uncertainty still lingers ahead of the August 1 retaliatory tariffs deadline. As a result, a section of Wall Street has turned bullish on the index.
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