#MarketRebound Main factors behind the rebound

1. Breather in trade tensions

The 90-day pause on tariffs between the U.S. and China sparked a significant rally: after the drop from April 2 to 10, the S&P 500 regained some of the lost ground and returned to positive territory for the year on May 13.

Ongoing negotiations, with constructive dialogue in London, encouraged global markets, including the Australian Stock Exchange, which reached historic highs.

2. Technical indicators and institutional bullishness

The S&P 500 crossed its 200-day moving average, a classic technical buy signal, while the VIX remained low, reflecting reduced nervousness.

“Big Money” (institutional investors) became more aggressive again after a period of divestment between March and May, reinforcing a possible “melt-up” scenario.

3. Small businesses recovering

The Russell 2000 (small caps) led the weekly rebound (+1.1%) following gains in the S&P and Nasdaq.

Analysts from Evercore and Alger see an opportunity: attractive valuations, seasonal momentum in June, and potential advantage from rate cuts.

4. Corporate earnings and upward revisions

Better-than-expected earnings reports from major tech companies (such as Nvidia, Microsoft, Apple) support the rally.

Morgan Stanley highlights an improvement in earnings revisions breadth, which historically precedes a significant rebound: a rise of the S&P to 6,500 is projected within 12 months.

5. Favorable macroeconomic context

Inflation is slowly easing, and the Federal Reserve opts for a more cautious stance: a mild recession is estimated to potentially lead to rate cuts by the end of the year and prolong the rally.

Sectors sensitive to low rates, such as consumer and small caps, would benefit more in that scenario.