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Published: 13 May 2026,08:44
Daily Market Analysis New
*US equities showed resilience despite hotter-than-expected April CPI data, which reinforced concerns over persistent inflation and reduced expectations for near-term Fed rate cuts.
*Investors shifted focus toward the high-stakes US-China summit in Beijing, where potential progress on trade, supply chains, and critical minerals could improve market sentiment.
*Positive summit outcomes may support a relief rally in China-exposed sectors such as tech and industrials, while weak progress could trigger renewed market volatility.
U.S. equities demonstrated notable resilience on May 12, 2026, following the release of April CPI data that exceeded expectations. Headline CPI rose 0.6% month-over-month and 3.8% year-over-year, marking the highest annual rate since May 2023 and surpassing consensus estimates. Core CPI also printed firmer at 0.4% MoM and 2.8% YoY. This acceleration, driven primarily by energy costs amid Middle East tensions (with gasoline up sharply), reinforced concerns over persistent inflation and reduced the likelihood of near-term Federal Reserve rate cuts.
Compounding the hawkish backdrop, the prior Friday’s April Non-Farm Payrolls report showed a solid 115K job gain, beating forecasts and signaling labor market strength that further limits monetary easing prospects. Conventionally, such data would exert downward pressure on risk assets by supporting higher-for-longer interest rates and elevating bond yields.
Yet major indices contained selling pressure, with the S&P 500 trimming intraday losses to close modestly lower. Market participants appear to be looking past the immediate macro headwinds toward the high-stakes U.S.-China summit commencing today in Beijing between President Trump and President Xi Jinping. The two-day talks, the first face-to-face in over six months, are expected to address trade imbalances, agriculture purchases, critical minerals access, investment frameworks, and geopolitical issues including Iran and Taiwan.
Positive outcomes—such as commitments on Chinese purchases of U.S. goods (soybeans, Boeing aircraft), extensions of the existing trade truce, or progress on rare earths and supply chain stability—could catalyze a relief rally in equities, particularly in sectors exposed to China (tech, industrials, materials). Risk sentiment may improve, supporting a weaker USD and lower Treasury yields in the short term. Conversely, limited deliverables or heightened rhetoric on sensitive issues could trigger renewed selling, amplifying volatility as traders reassess growth and inflation trajectories.
With the summit outcomes likely to dominate near-term flows, traders should monitor headline developments closely while maintaining hedges against policy uncertainty. Position sizing and agility remain critical as macro data and geopolitics intersect.
Technical Analysis
S&P 500 has staged a strong one-to-one bullish rally, with the index climbing back to a fresh all-time high at 7,437.65. The move reflects the resilience of the broader bullish trend, although recent price action suggests that upward momentum may be beginning to moderate.
Technically, the formation of a morning star candlestick pattern signals the potential for continued bullish follow-through and highlights renewed buying interest following the recent rebound. However, momentum indicators are beginning to show signs of fatigue, suggesting that bullish momentum is gradually easing despite the index remaining near record highs. This divergence raises the possibility of increased volatility or a short-term corrective pullback in the near term.
A decisive breakout above the 7,437.65 resistance level would confirm continuation of the bullish trend and could pave the way for further upside extension. Conversely, should the index lose traction, a retracement toward the immediate support zone near 7,300 remains a plausible scenario before buyers potentially re-emerge.
Overall, while the broader trend remains constructive, the softening momentum signals suggest that traders should remain cautious of near-term consolidation or corrective price action.
Resistance Levels: 7530.00, 7646.00
Support Levels: 7300.00, 7179.00
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