Summary of Spanish Stock Market Rebound
The Spanish stock market is experiencing a significant rebound, with the IBEX 35 index rising over 3% to surpass 19,300 points following the recent U.S. midterm elections. This resurgence marks one of the strongest performances in Europe, driven by a shift in investor sentiment towards Spanish assets.
Political Context
Spain has faced considerable political tension with the U.S., particularly under the administration of Donald Trump. The conflict began in June 2025 during a NATO summit, where Spain's government, led by Pedro Sánchez, was criticized for securing an exemption from a new defense spending target. Trump's remarks included threats of trade penalties and tariffs, particularly in response to Spain's stance on various geopolitical issues, including its criticism of Israel and the implementation of a digital tax on American tech companies.
Market Reaction to U.S. Elections
The recent midterm elections in the U.S. are perceived as a turning point that may limit the White House's ability to impose aggressive trade policies against Spain. This change in the political landscape has contributed to a decrease in perceived geopolitical risks, which, combined with falling energy prices, has positively impacted the Spanish economy and stock market.
Market Valuation and Technical Analysis
As of now, the price-to-forecast-earnings ratio for the IBEX stands at 12.7, down from a peak of 14.3 in mid-2026, indicating that while the index is above its recent average of 11.8, it is not overvalued. The index's recent rebound began at a critical technical level, specifically at the 200-session exponential moving average of 18,563 points. The market is currently facing resistance in the range of 19,250 to 19,420 points, which has historically been a consolidation zone.
Future Outlook
The ability of the IBEX 35 to maintain its upward momentum will depend on breaking through the current resistance levels. A sustained move above 19,420 points could lead to further gains towards 19,680 to 19,850 points, with the potential to reach August highs around 20,300 points. Conversely, failure to maintain this momentum may result in a pullback towards the moving averages at 18,550 points.
Market Sentiment
The Relative Strength Index (RSI) has recently crossed above the 50 level, indicating a shift in momentum favoring buyers, although the market is not yet overbought. The upcoming trading sessions will be crucial in determining whether the optimism surrounding the Spanish market can be sustained.