Stocks edge up as Trump teases new trade deals – but S&P 500 still can’t break resistance

Stocks pushed slightly higher on Friday as President Donald Trump, from the White House, said new trade agreements were on the way. He also backed reducing tariffs on China ahead of weekend meetings.But even with those announcements, the S&P 500 still failed to cross a major resistance level, keeping traders stuck in the same limbo they’ve been in for weeks.Trump posted on Truth Social, “Many Trade Deals in the hopper, all good (GREAT!) ones!” That came right after he announced a draft agreement with the United Kingdom, the first international trade deal from the US since Trump’s so-called “reciprocal tariff” update in early April.Investors responded with cautious gains: the Dow Jones Industrial Average rose 87 points (0.2%), the S&P 500 climbed 0.4%, and the Nasdaq Composite increased 0.6%. Still, none of that fixed the bigger problem.Traders watch S&P stall again below key levelThe S&P 500 ended Thursday at around 5,664, which looked decent on paper, but it was far below the intraday high of 5,720. Just before 3:30 p.m. ET, the index was sitting at 5,709, but it dropped hard into the close. That pattern—brief optimism followed by a late-day selloff—has been the story for weeks.Rob Ginsberg, a strategist from Wolfe Research, said, “Not the ideal close, as ~5700 resistance is proving to be quite stubborn since the S&P first took it out 2 months ago.” He explained that traders were looking for a close above 5,700, which hasn’t happened since late March—right before Trump dropped his April 2 tariff announcement.Rob added that the S&P also stayed under its 200-day moving average, which now sits at around 5,748. “Ebullience on the UK trade deal gave way to a late day fade as the market once again closed below its 200-day moving average,” he said. He called the average a useful indicator of long-term trend changes. Over the past two months, the index has only closed above that number twice. The last time was on March 25, when it ended at roughly 5,777.Without a clean break above 5,700 and the 200-day, Rob warned the rebound from April’s low might collapse fast. So even with Trump’s talk about cutting tariffs or landing deals, nothing’s changing until those resistance levels finally break.Bearish signal from Bloomberg model adds pressureAt the same time, a major stock market signal just flashed red. The Equity Market Regime Model, built by Bloomberg Intelligence, has now dropped into its worst phase—known as the “red zone.” That phase has historically pointed to weak future performance for the S&P 500, especially when it’s triggered by macro fears like trade policy confusion.Source: Bloomberg IntelligenceGina Martin Adams and Gillian Wolff, who manage the model, said this change happened in both March and April. It’s the first time the model turned red since February 2022, when concerns over Federal Reserve rate hikes dragged US stocks into a bear market.The numbers are clear. In the seven past instances where the model entered this phase, the S&P 500 lost an average of 5.6% over the next 12 months. Right now, it’s unclear whether that will happen again. But the model had previously stayed in the “neutral yellow” zone for nearly 21 months, so the flip to red is significant.Gina and Gillian said the red phase is still “early” for most of the model’s pieces, meaning the full impact hasn’t been felt yet. That makes some traders think more downside is ahead, especially with Trump’s trade policy still leaving many questions unanswered. Investors are now split. Some think the worst is over. Others are bracing for more selling.Either way, stocks aren’t breaking out yet. And if the S&P 500 keeps failing at 5,700, no amount of new trade deals or social media posts are going to save it.Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now