The S&P 500 lost a three-month winning streak in June, but numerous factors suggest the broader rally may still have room to run, offering investors reasons to remain optimistic despite the recent pullback.
According to a Reuters market analysis, the benchmark U.S. stock index posted its first monthly decline since March, ending a powerful stretch that had lifted equities to record highs. Even with June's modest retreat, the index delivered a gain of more than 14% during the second quarter, marking its strongest quarterly performance since the dramatic rebound following the pandemic-driven market collapse in the second quarter of 2020.
The first half of 2026 has also been remarkably strong for U.S. equities. The S&P 500 climbed roughly 9.5% through the first six months of the year, representing its best first-half performance since 2024, when the benchmark advanced approximately 14.5%.
Technical analysts say one of the most encouraging developments has been the index's quick recovery above its 50-day moving average, a widely followed indicator that helps traders assess the market's intermediate-term momentum.
The moving average represents the average closing price over the previous 50 trading sessions and is often viewed as a dividing line between bullish and bearish market trends. After briefly falling below that level for the first time since early April, the S&P 500 rapidly reclaimed it and has remained above it, a pattern many market participants interpret as evidence that buyers continue to dominate trading.
"The swift recovery above the 50-day moving average is generally viewed as a bullish momentum signal," Reuters noted in its chart analysis, suggesting investors have continued buying dips rather than abandoning the market.
The benchmark currently trades around 7,483, leaving it about 1.7% below its record closing high of 7,609.78 reached in early June. It also sits roughly 1.8% below its all-time intraday peak of 7,620.90.
Should the rally resume, traders will closely monitor several technical resistance levels where selling pressure has historically emerged. The first significant hurdle lies near 7,530, followed by another resistance area around 7,578. If the index successfully breaks through those levels and establishes fresh records, analysts say the psychologically significant 8,000 mark could become the next major target.
Round-number milestones often attract increased investor attention because they can influence market sentiment even when they lack fundamental significance. Still, Reuters cautioned that the bullish outlook is not guaranteed.
A decline below the rising 50-day moving average, currently positioned near 7,385, could weaken the positive technical picture and slow the rally's momentum. If that support fails, traders would likely focus on another support zone around 7,294.
Should selling pressure intensify further, analysts say the index could retreat toward approximately 7,238, with the 7,000 level representing a more significant downside threshold if market sentiment deteriorates substantially.
