S&P 500 approaches gap level of 7580 after deal between US and Iran

The stock market starts the week turbulently. After the alleged agreement between the US and Iran, the S&P 500 opens with a significant gap downwards, but at the same time the index is moving towards the gap level that was left around 7580 last week. These are two important levels to keep a close eye on in the coming days.

Two gaps dominate the market this week

On the chart, two zones are clearly visible. On the one hand, there is the gap downwards that occurred at the opening on 15 June, as a result of the news about the alleged US/Iran deal. That gap is roughly between 7440 and 7527. On the other hand, there is the open gap at the top, which was left last week during the sharp decline and now lies around 7558 to 7580.

Analyst DaanCrypto points to both levels as crucial zones for the rest of the week. The S&P 500 currently stands at 7550 at the time of writing, which means the upper gap is quickly coming into range. Whether it will be fully closed remains the question. The market is currently reacting to geopolitical developments, which increases volatility. To read more about what the Iran deal means for Bitcoin and the broader crypto market, see this article about the deal between the US and Iran.

AI stocks pick up a bid again

In addition to the gap zones, it is noticeable that AI-related stocks are again showing an upward move first. This pattern repeats regularly during market recoveries: investors first reach for AI names as soon as buying momentum emerges.

Whether this recovery is structural or only temporary largely depends on how the market reacts to the two gap levels in the coming days. If the S&P 500 closes the upper gap around 7580, that is a positive signal. If the index falls back to the lower gap around 7440, the bearish scenario regains the upper hand.