China Climbs, U.S.A. Sulks: When the Narrative Breaks and the Market Speaks

This week offered a striking contrast between geopolitical rhetoric and actual market performance. While U.S. policymakers doubled down on anti-China sentiment—with renewed tariff threats and talk of delisting Chinese firms—Chinese equities quietly posted solid gains. Mainland China (FLCH) rose 3.03%, and Hong Kong (FLHK) added 1.91%, defying the headlines. Meanwhile, the United States (FLQL) fell sharply by -2.91%, placing it near the bottom of global performance tables, just above Turkey. The dissonance is hard to ignore: are markets beginning to see through the saber-rattling, or is the U.S. acting like a frustrated player not getting its way in an increasingly multipolar financial world? Either way, the scoreboard doesn’t lie—this week belonged to international markets. Latin America led with Argentina (ARGT) soaring 9.58% and Peru (EPU) up 4.53%, while Canada (FLCA) posted a solid 2.61%. Europe followed with strength across the board—Belgium (EWK) rose 5.78%, Spain (EWP) 4.81%, and Italy (EWI) 3.88%, as even traditional heavyweights like Germany (FLGR) and France (EWQ) finished in the green. In Asia, despite heightened tensions, China outperformed while Australia (FLAU) gained 3.75%, and regional names like Indonesia (EIDO), Thailand (THD), and South Korea (FLKR) all posted positive returns. The U.S. alone bucked the trend—and not in a good way.

Given the weakness in U.S. equity markets, we thought it would be timely to update the SIA Point and Figure charts for the S&P 500 Index (SP500). After reaching a high of 6100 in early 2025, the S&P 500 Index has shed 1,000 points, bottoming out in early April at a key support level dating back to May 2024. This move effectively erased a year’s worth of gains in just two months. Since then, buyers appear to have regained control, with the Point and Figure chart returning to a column of Xs and climbing toward resistance near 5524—though the index currently sits at 5298. Beyond this level, additional resistance may be visible on the chart at 5691 and 5805, levels that advisors may want to monitor closely. However, this recovery is occurring against a backdrop of weak SIA relative strength readings, which our practitioners can assess via the Asset Allocation Rankings and Equity Action Call within the SIA site.From a support standpoint, the Point and Figure chart for the S&P 500 Index shows near-term support at the 3-box reversal level of 5203, with a secondary support level at 5000. A close at 4951 would trigger a spread triple bottom sell signal—a key technical threshold. Meanwhile, the near-term relative strength, as measured against other asset classes, continues to show weakness, with the SMAX reading at 4 out of a possible 10, potentially indicating below-average short-term strength

The Dow Jones Industrial Average has experienced a similar decline, falling from a high of 45,000 to a recent low of 38,000. As with the S&P 500, buyers stepped in at a technical support level dating back to early 2024. The index has since rallied, nearing resistance levels at 41,080 and 41,490, although it currently reads at 38,319 following a steep drop attributed to UnitedHealth (UNH). UNH shares plunged more than 20% after the company lowered its full-year earnings forecast due to higher-than-expected medical costs. As the highest-priced stock in the price-weighted Dow, UnitedHealth’s decline had an outsized impact, dragging the index down more than 500 points before it recovered some of the losses. Despite this volatility, the Dow remains above its initial support level at 38,699, with prior support at 37,561 still representing a critical technical threshold. A break below this would also trigger a spread triple bottom sell signal on the Point and Figure chart.