Wall Street's darling rally just hit a technical speed bump. According to JPMorgan’s Jason Hunter, the S&P 500 and its heavyweight tech crew — the Magnificent Seven — are stuck below crucial resistance levels, raising the risk of a summer slump before any sustainable comeback.

S&P 500 Faces Key Resistance

Hunter flags the 5425-5650 zone as a brick wall for the S&P 500, noting that the index has already rejected that threshold in early-April and is still showing signs of fragility. While bulls may be eyeing fresh highs, JPMorgan's read is more cautious. According to Hunter, the index could slide back to 4500-4800 — a zone that could mark a "more durable bottom” — before setting up for a more solid rebound later this year.

Magnificent 7 Consolidating Below Breakdown Levels

But the real story, Hunter says, lies in the Magnificent 7 — Apple Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), Amazon.com Inc (NASDAQ:AMZN), NVIDIA Corp (NASDAQ:NVDA), Meta Platforms Inc (NASDAQ:META) and Tesla Inc (NASDAQ:TSLA) — all of which have broken down from long-standing uptrends.

That, in Wall Street speak, means they're no longer leading the charge — at least for now.

Read Also: EXCLUSIVE: Meta’s Still The Mag 7 Standout, Says Expert – But Can It Hold On?

These “stocks are now consolidating within volatile ranges below their respective breakdown levels," Hunter wrote, suggesting investors may face more whiplash than windfall this summer.

The technical analyst isn't ruling out rebounds, but he's skeptical of anything more than short-term bounces: "The medium-term trend bias stays negative while below those resistance zones." Translation: don't chase the rips, especially if you’re expecting a V-shaped recovery.

Stay Cautious: Watch for Clear Bottoming Patterns

For investors, the implication is clear: tactically trim exposure to high-fliers and consider rotating into safety until the dust settles.

ETFs like the Invesco S&P 500 Low Volatility ETF (NYSE:SPLV) and the iShares MSCI USA Min Vol Factor ETF (NYSE:USMV) may offer a softer landing.

Meanwhile, those still bullish on AI and Big Tech could look to dollar-cost average into dips via diversified exposure through the Invesco QQQ Trust (NASDAQ:QQQ) or the iShares U.S. Technology ETF (NYSE:IYW) — but with a side of patience.

The bottom line?

Until the S&P 500 breaks above resistance and the Magnificent 7 prove they can reclaim lost ground, expect more chop than charge. Or, as Hunter subtly puts it, we need to "see clear price action that looks like a maturing bottoming process."

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