The S&P 500 sold off sharply last week as weakness in technology and AI-related stocks weighed on the index. Concerns about the profitability of massive AI investments, disappointing corporate earnings and rising financing costs triggered a rotation away from growth stocks, while increasing uncertainty around future AI spending raised questions about the sustainability of the current earnings and growth outlook.However, the weakness was led by a broader combination of negative macroeconomic, geopolitical and positioning risks. Higher-than-expected inflation data strengthened concerns about a prolonged tightening cycle from the Federal Reserve, while renewed US-Iran tensions and surging oil prices increased the risk of a growth slowdown. This came at a time when positioning had become very crowded, leaving equities vulnerable to a sharper correction.Looking ahead, the focus will be on US-Iran negotiations and the US midterm elections. The S&P 500 rebounded yesterday after Iran proposed a two-day framework to reopen the Strait of Hormuz in exchange for US concessions and Iran’s President said that the Supreme Leader had granted the government additional authority regarding negotiations which was taken as a positive sign for greater flexibility to reach a deal. The market couldn’t sustain the gains, though, and eventually dropped to new lows after the US struck sites on Iran’s Qeshm Island overnight. US officials said the strikes were in response to Iran firing at a US aircraft and did not signal the start of a broader military operation.Trump said he was not looking to strike Iran after the midterm elections, although officials confirmed that all options remain on the table. Meanwhile, Axios reported that the CIA Director had advised Trump to maintain a "no war, no deal" approach, allowing economic pressure on Iran to continue.Nevertheless, the negotiations continue with Qatar’s Foreign Ministry Spokesperson saying this morning that both sides are currently studying the proposal and they remain committed to the mediation process. A breakthrough could trigger a strong relief rally as lower energy prices would ease inflation concerns, reduce expectations of further Fed tightening and improve the growth outlook. Setbacks or renewed military escalation, on the other hand, could trigger another leg lower in equities.Moving on to US midterm elections, a Democratic takeover of the House is largely expected and should therefore be priced in. A blue sweep could put additional pressure on equities on expectations of greater fiscal restraint, especially without an end to the Iran war. A surprising Republican sweep, on the other hand, could support stocks through expectations of further fiscal expansion. S&P 500 TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that the S&P 500(CFD contract) is trading near the key 7,506 swing level. We can expect the buyers to step in around this level, with a defined risk below it, to position for a rally into new record highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 7,300 level next.S&P 500 TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we have a downward trendline defining the bearish momentum. If we get a pullback, we can expect the sellers to lean on the trendline, with a defined risk above it, to keep targeting the 7,300 level. The buyers, on the other hand, will look for a break higher to pile in for a rally into new record highs, with the next trendline as the first target.S&P 500 TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we could form another minor downward trendline if the price makes a new low. The sellers will then use the trendline as resistance to keep pushing into new lows, while the buyers will look for a break to pile in for a pullback into the trendline around the 7,580 level. The red lines define the average daily range for today. UPCOMING CATALYSTSTodaywe have the US Job Openings data and the US midterm elections, although we will get the first results early tomorrow. Tomorrow, we have the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report and the University of Michigan Consumer sentiment survey. This article was written by Giuseppe Dellamotta at investinglive.com.