The S&P 500 faces a potential earnings growth slowdown as Q2 reporting begins for major banks. Technical analysis suggests an imminent corrective decline for the S&P 500.
Chart of the week: US SPX 500
The US stock market will unofficially kickstart the Q2 earnings reporting session this week, starting with the earnings results of the major banks: JP Morgan, BlackRock, Citigroup, and Wells Fargo on Tuesday, 15 July, followed by Bank of America, Goldman Sachs, and Morgan Stanley on Wednesday, 16 July.
Data from S&P and Dow Jones Indices compiled by MacroMicro as of 11 July has indicated a potential earnings growth slowdown in the US S&P Financials sector for the second quarter, where the average analysts’ forward estimates of Q2 2025 earnings per share growth have projected a further slowdown to -10.23% y/y from -8.03% y/y in Q1 2025 (see Fig. 1).
Fig. 1 – US S&P 500 Financials sector Q2 EPS growth (y/y) estimates as of 11 July 2025 (Source: MacroMicro)
In addition, technical analysis suggests an imminent potential minor corrective decline sequence in the US SPX 500 CFD Index within a medium-term uptrend phase that is still intact since the 7 April 2025 low after it failed to break above its current all-time high level of 6,290 on last Thursday, 10 July.
Fig. 2: US SPX 500 CFD Index medium-term trend as of 14 July 2025 (Source: TradingView)
The 4-hour RSI momentum indicator flashed out a recent bearish divergence condition on 10 July after it hit its overbought region and staged a bearish breakdown below a parallel ascending support on 11 July. The current value of the 4-hour RSI has dipped below 50 (now at 45), which has not reached an oversold level (below 30) (see Fig. 2).
These observations suggest a potential bearish momentum condition has emerged in the US SPX 500 CFD Index, at least on a short-term horizon.
Watch the 6,290 key medium-term pivot resistance for the next medium-term supports to come in at 6,140 (also the 20-day moving average) and 6,050/6,008 (also the 50-day moving average).
On the other hand, a clearance with a daily close above 6,290 invalidates the bearish scenario for the continuation of the bullish impulsive up move sequences to expose the next medium-term resistances at 6,390/6,480 and 6,610.
