Geopolitical tension dominates markets again as the S&P 500 emerges top pattern

Risk-off sentiment may dominate broader market movements this week, as tensions between the US and Iran have escalated again. Iran has reportedly launched missiles toward the UAE, while the US claims to have sunk an Iranian vessel in the Strait of Hormuz, driving oil prices higher once more.

The S&P 500 $S&P 500 Index (.SPX.US)$ is showing signs of a potential technical top near the 7,200 level. Although equities broadly declined yesterday, cryptocurrencies and brokerage-related stocks rallied sharply. This was largely driven by developments surrounding the CLARITY Act, which allows Circle $Circle (CRCL.US)$ to retain stablecoin reward programmes under certain conditions, boosting its share price by around 20%.

Bitcoin has broken above the $80,000 level again, marking its highest level since 1 February. Crypto-related broker stocks also moved higher, including Coinbase $Coinbase (COIN.US)$ (+6.14%), Robinhood $Robinhood (HOOD.US)$ (+4%), and Strategy $Strategy (MSTR.US)$ (+3.74%).

Meanwhile, storage-related names continued to reach new highs, with Micron Technology $Micron Technology (MU.US)$ (+6.3%) and SanDisk $SanDisk (SNDK.US)$ (+5.8%) leading gains.

Precious metals remain under pressure, as rising inflation expectations driven by higher oil prices, alongside increasing US Treasury yields, continue to weigh on gold and silver prices.

Technical takeaways - $S&P 500 Index (.SPX.US)$ daily charts shows potential top formation

1. A inverted hammer, followed by a negative candle stick, can be seen as a typical top formation of an upward trend.

2. Meanwhile, the price and RSI forms bearish divergence with price has hit a new high, while RSI did not reach a new high.

3. MACD's DIF and DEA are approaching a dead cross, signalling that downward momentum is building.

4. The long-term uptrend remains intact.

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