Unlock the power of divergence analysis! Join Dave as he breaks down what a bearish momentum divergence is and why it matters. Throughout this video, Dave illustrates how to confirm (or invalidate) the signal on the S&P500, Nasdaq100, equal‑weighted indexes, semiconductors, and even defensive names like AT&T (T).
This video originally premiered on June 10, 2025. Watch on StockCharts’ dedicated David Keller page!
Previously recorded videos from Dave are available at this link.
Unlock the power of divergence analysis! Join Dave as he breaks down what a bearish momentum divergence is and why it matters. Throughout this video, Dave illustrates how to confirm (or invalidate) the signal on the S&P500, Nasdaq100, equal‑weighted indexes, semiconductors, and even defensive names like AT&T (T).
This video originally premiered on June 10, 2025. Watch on StockCharts’ dedicated David Keller page!
Previously recorded videos from Dave are available at this link.
While the S&P 500 ($SPX) logged a negative reversal on Wednesday, the Cboe Volatility Index ($VIX), Wall Street’s fear gauge, logged a positive reversal. This is pretty typical: when the S&P 500 falls, the VIX rises.
Here’s what makes it interesting: the VIX has quietly crept up in three of the last four days. Before the midday pivot, the VIX hit its lowest level since February 21, 2025. And while that wasn’t the low in February, it was close. As the chart below depicts, back then, the VIX’s intraday low occurred on February 14, 2025, a few days before the SPX topped on February 19.
It wasn’t a screaming sell signal for equities. The S&P 500 was set to follow through on the big cup-with-handle pattern breakout, even though two straight bullish patterns failed in December and January.
Ultimately, the combination of the S&P 500 failing to get much higher than 6,100 and the VIX bouncing near support set the stage for the market rolling over. It was, of course, news-induced, but the market’s character had been changing since December, when breadth first took a major hit.
So, with the VIX closer to that same support zone now than it has been at any time the last few months and the S&P 500 back above 6,000, the pendulum has swung back near the extreme levels where the fireworks began. But there are two major differences now vs. then.
Bullish patterns weren’t holding up well in December, January, and February (and then again in March). But they are working now.
Let’s not take this for granted. The S&P 500 starts the day with three live bullish patterns, and the index already hit one upside objective (5,840).
Most importantly, the index has extended above the breakout zones of the two biggest ones by 5.4% and 9%, respectively (see charts below). This means it could endure a not-so-small drawdown, and the patterns (and their upside targets) would remain in place. The index had no such cushion in February.
Since April 21, the S&P 500 has logged just one 1% decline, which now spans 35 trading days. It had 20 over the prior 71 days since January 6, 2025. That’s a rate of 2.8% vs. 28%. We had literally 10 times more 1% declines from January to April 21.
We didn’t see too many 1% losses in the first few weeks of 2025 either (see chart below). But with the index continuously failing at resistance, it just couldn’t leverage the low-volatility environment like it did from late 2023 through late 2024. As described above, in the last two months, the S&P 500 has been capitalizing on breakouts on low two-way volatility.
So, could all of this completely flip again with a massively surprising “unknown unknown” headline? There’s always that risk. And we know about the big collection of sell signals out there (MACD and Demark).
All of this suggests a respite is due. Bulls and bears seem to agree about that. What they don’t agree upon is the severity of that next pullback. There’s no use in trying to predict how far or how damaging it will be, however. As long as the bullish patterns remain intact, the nascent uptrend has a chance to continue in the months to come.
Let’s take a closer look at one of the more popular growth-focused ETFs: ARK Innovation ETF (ARKK). Despite finishing off its highs, ARKK logged its fourth straight gain yesterday and is now up eight of the last nine trading sessions. Over that time, it has fully leveraged the bull flag we mentioned two weeks ago. The target from that pattern is near $67.
ARKK also logged its third straight trading box breakout in the last few days. So, from a short-term pattern perspective, things have continued to work for the stock.
Indicator-wise, ARKK is now officially overbought for the first time since last December. Over the last year, here’s how the ETF has fared after first reaching overbought territory.
Last July, ARKK hit its summer top just a few days after becoming overbought. In November and December (while ARKK’s upswing continued through mid-February), the ETF pulled back to levels below where the relative strength index (RSI) first hit 70 over the ensuing days/weeks both times.
In other words, this is not the best trading setup for new short-term longs. We expect the risk-reward to improve after the next pullback.
ARKK is also approaching the upper threshold of its big two-year trading channel, which could slow things down soon.
The S&P 500 is rising slowly and steadily, volatility is still relatively low, and growth plays like ARKK are looking strong, although they may be due for a pullback in the near term. Keep an eye on the chart patterns that are forming and look for investment opportunities on pullbacks.
Three sectors stand out, with one sporting a recent breakout that argues for higher prices. Today’s report will highlight three criteria to define a leading uptrend. First, price should be above the rising 200-day SMA. Second, the price-relative should be above its rising 200-day SMA. And finally, leaders should trade at or near 52-week highs. Let’s compare the Utilities SPDR (XLU) to see how it stacks up.
The CandleGlance charts below show the top five sectors and SPY. I am ranking performance using Fast Stochastics (255,1). Stochastic values reflect the level of the close relative to the high-low range over the given period. 255 trading days is around 1 year. An ETF is at a 52-week high when the value is above 99 (XLK) and an ETF is near a new high with a value above 90 (XLU). The CandleGlance charts show XLK, XLI and XLU with values above 90, which means the are near new highs.
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TrendInvestorPro is following the breakout in XLU, the bull flag in GLD, a small wedge in AMLP, a breakout in XLP and more. We also covered trailing stop alternatives for the pennant breakouts in some key tech related ETFs. Take a trial and get three free bonus reports.
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Now let’s turn to price action. XLU is trading above its rising 200-day SMA. Thus, the long-term trend is up. XLU also broke falling channel resistance in early May. The pink lines show a falling channel that retraced around 61.8% of the July-December advance (23.6%). Both the pattern and the retracement amount are typical for corrections within a bigger uptrend. The early May breakout signals a continuation of the long-term uptrend and new highs are expected. The May lows mark first support at 78. A close below this level would warrant a re-evaluation.
And finally, let’s measure relative performance using the price-relative (XLU/RSP ratio). The lower window shows the price-relative in an uptrend for over a year and above its 200-day SMA since early March. This shows long-term relative strength. The pink trendlines show relative performance corrections when XLU underperformed for short periods. XLU is currently experiencing an underperformance correction because the broader market surge from early April to early June.
TrendInvestorPro is following the breakout in XLU, the bull flag in GLD, a small wedge in AMLP, a breakout in XLP and more. We also covered trailing stop alternatives for the pennant breakouts in some key tech related ETFs. Click here to learn more and gain immediate access.
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Catching a sector early as it rotates out of a slump is one of the more reliable ways to get ahead of an emerging trend. You just have to make sure the rotation has enough strength to follow through.
On Thursday morning, as the markets maintained a cautiously bullish tone, I checked the New Highs panel on the StockCharts Dashboard, scanning the 1-, 3-, 6-, and 9-month highs list. A clear theme emerged—biotech and healthcare stocks dominated the shorter-term highs.
Seeing strength in healthcare and biotech, I checked the Market Summary BPI panel to compare breadth across sectors. Healthcare posted a 63.93% reading—an early sign the sector may be turning higher.
Comparing the broader sector with the biotech industry, the Key Ratios – Offense vs. Defense panel showed that Biotech outperformed Healthcare by a modest 2.31% over the past three months. This panel compares the SPDR S&P Biotech ETF (XBI), which represents the biotech sector, with the broader Health Care Select Sector SPDR Fund (XLV).
So, are we seeing an early rotation of both industry and sector toward the upside, and could either be shaping up as an opportunity for investment? Let’s take a comparative look at both relative to the SPDR S&P 500 ETF (SPY), our broad market stand-in.
FIGURE 1. PERFCHARTS OF XBI, XLV, AND SPY. This is typical of what you’d see during an early-stage rotation.
This PerfCharts view shows a one-year snapshot of relative performance, with biotech lagging behind healthcare, and both trailing the SPY in negative territory. Yet XBI and XLV are showing signs of recovery, with XBI exhibiting a sharper angle of ascent.
Now here’s an interesting addition to the current analysis: what if we considered the industry and the sector from a seasonality perspective? The reason for this is that certain sectors and the industries within them tend to exhibit recurring patterns of strength or weakness during specific times of the year. If we’re seeing a potential turning point in either, could a seasonality lens offer additional insight or clarity to the analysis?
Let’s start with XBI, and notice how it’s now entering a cluster of seasonally-favorable months.
FIGURE 2. SEASONALITY CHART OF XBI. The industry is entering a cluster of seasonally strong months.
According to this 10-year seasonality chart, June, July, August, and November tend to be strong months for XBI, with positive closing rates well above 50% (see figures above each bar) and higher-than-average returns (see figures at the bottom of the bars). Among them, June and November stand out as XBI’s strongest seasonal months.
FIGURE 3. SEASONALITY CHART OF XLV. According to this, July is XLV’s second-strongest month after November.
XLV’s seasonal profile shares a similar pattern, with a few key differences. July emerges as XLV’s second-strongest month, boasting a close rate of 89% and an average return of 3.1%. Like XBI, November is XLV’s top month in terms of average return.
What this tells us is that the biotech industry and the broader healthcare sector have historically performed well during these periods (especially November), suggesting that seasonal strength could serve as a tailwind if the current rotation continues to build momentum.
Next, let’s take a look at their current price action, starting with a daily chart of XBI.
FIGURE 4. DAILY CHART OF XBI. Notice how the trend structure is well-defined by the Fibonacci retracement, providing clear measurements for you to gauge the subsequent directionality once the market decides which way XBI will go.
XBI’s price action shows it reversed at the 50% Fibonacci Retracement level (November high to April low). Will the bears take control, or will XBI’s near-term reaction strengthen into an uptrend, eventually pushing XBI past the 61.8% retracement level, a threshold wherein bears may fold their positions and bulls increase theirs?
In light of the latter, the Relative Strength Index (RSI) is at 61 and rising, indicating room for upside, but only under the condition that the current bullish swing maintains its trajectory.
A few actionable tips. If you’re bullish on XBI and planning to add it to your portfolio, consider the following:
If XBI rotates in a bullish fashion, these key levels can help guide your analysis.
Next, shift over to a daily chart of XLV. You’ll notice it’s quite different despite also exhibiting a recovery.
FIGURE 5. DAILY CHART OF XLV. Unlike the previous example, XLV’s price action is more muddled.
XLV’s recovery doesn’t appear as convincing just yet, as it still needs to clear multiple swing highs and resistance levels clustered between $139 and $141 (highlighted in green). If it manages to break above this zone, the next resistance range—shaded in yellow—sits between $148 and $150. In short, the sector proxy faces several hurdles and technical headwinds ahead.
The RSI, at 58 and rising, is nowhere near overbought territory, but it may not immediately indicate bullishness unless XLV is able to establish an uptrend. For now, it isn’t clear if that will happen, so exercise caution.
From an actionable standpoint, the current technical structure doesn’t offer a clear entry setup. That’s largely because the trend lacks a well-defined sequence of higher swing highs and higher swing lows—something you’d typically look for when establishing favorable entry and exit positions.
If healthcare and biotech are starting to rotate higher, XBI and XLV are the charts to watch. XBI shows a stronger trend structure, while XLV still faces resistance. With seasonality on their side, add them to your ChartLists to track key levels and price action.
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.
With Friday’s pullback after a relatively strong week, the S&P 500 chart appears to be flashing a rare but powerful signal that is quite common at major market tops. The signal in question is a bearish momentum divergence, formed by a pattern of higher highs in price combined with lower peaks in momentum, which indicates weakening buying power after an extended bullish phase.
Today, we’ll share a brief history lesson of previous market tops starting with the COVID peak in 2020. And while we don’t necessarily see a sudden downdraft as the most likely outcome, this bearish price and momentum structure suggests limited upside for the S&P 500 until and unless this divergence is invalidated.
First, let’s review some classic market tops, see how divergences are formed, and learn what often comes next.
The year 2020 started in a position of strength, continuing the uptrend phase of 2019. But conditions soon deteriorated, with weaker momentum and breadth signals flashing cautionary patterns. In the chart below, we can see the higher highs and higher lows in price action in January and February 2020.
Notice how the RSI was overbought at the January peak but not overbought at the February top? This pattern of higher prices on weaker momentum is what we’re looking for, as it implies a lack of buying power and therefore limited upside.
Almost two years later, the market had been driven higher due to an unprecedented amount of liquidity injected into the financial system. Toward the end of 2021, however, we saw the familiar bearish divergence flash again.
Here, we can see the higher price highs in November 2021 through January 2022 were marked by lower readings on momentum indicators like RSI. It’s worth noting here that these divergences don’t happen in a vacuum. In other words, we can use other tools in the technical analysis toolkit to evaluate the trend and determine if the price is reacting as expected to the bearish divergence.
In the weeks after the 2022 peak, we can see that the price broke down through an ascending 50-day moving average. The RSI eventually broke below the 40 level, confirming the rotation from a bullish phase to a bearish phase. So while the divergence itself does not imply a particular path in the months after the signal, it alerts us to use other indicators to validate and track a subsequent downtrend move.
More recently, the February 2025 market peak featured some classic momentum patterns going into the eventual top.
Starting in August 2024, we can see a series of higher price highs that were accompanied by improving RSI peaks. As the price was moving higher, the stronger momentum readings confirmed the uptrend phase. Then, starting December 2024, the next couple price peaks were marked with weaker momentum readings. This bearish divergence with price and RSI once again signaled waning momentum going into a major market peak.
That brings us to the current S&P 500 chart, featuring yet another bearish momentum divergence. And based on what we’ve reviewed so far, you can probably understand why I’m a bit skeptical going into next week!
To be fair, I’ve highlighted price and momentum divergences from significant market tops, many of which came after extended bull market phases. In this case, we’re still only two months off a major market low. However, I would argue the basic premise still holds true. With Friday’s pullback, the S&P 500 appears to be flashing this same pattern of higher prices on weaker momentum. Considering this negative rotation on momentum, I would anticipate at least a retest of the May swing low around 5770.
What would change this tactical bearish expectation? The only way for a bearish divergence to be negated is for the price to continue higher on stronger momentum. So, until we see the price make a new peak combined with the RSI pushing back up to overbought levels, a pullback may be the most likely scenario in the coming weeks.
RR#6,
Dave
P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!
David Keller, CMT
President and Chief Strategist
Sierra Alpha Research LLC
https://www.youtube.com/c/MarketMisbehavior
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.
The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.
The canonization of Carlo Acutis, the Catholic Church’s first millennial saint, will take place on September 7, Pope Leo XIV has announced.
Acutis, an Italian teenager who died from leukemia in 2006, will be declared a saint by Leo at a ceremony in St. Peter’s Square expected to be attended by thousands of young people.
Acutis was just 15 when he died, but during his short life he used his computing skills to spread awareness of the Catholic faith by setting up a website that documented reports of miracles.
The Vatican said on Friday that following a meeting with cardinals Pope Leo will canonize Acutis in September, along with another youthful saint, Pier Giorgio Frassatti, who died in 1925 at age 24. Acutis’ canonization had been scheduled for April 27 but was postponed after the death of Pope Francis.
The September 7 ceremony will be the first canonization presided over by Pope Leo, the first American pontiff.
Acutis, nicknamed God’s influencer, has developed a strong following among young Catholics and beyond. The British-born Italian teenager, who loved video-gaming, is often depicted wearing jeans and trainers, making him a relatable figure to a new generation of Catholics.
His canonization also comes as recent surveys in the United Kingdom and United States show a rise in interest in Catholicism among Generation Z.
The church’s sainthood process normally requires that candidates have two miracles attributed to them, with each reported supernatural occurrence requiring in-depth examination. In May, a second miracle attributed to Acutis was recognized by Pope Francis, a decision that paved the way for the teen to be declared a saint.
Acutis was beatified (declared “blessed”) in 2020 after his first miracle, when he reportedly healed a Brazilian boy with a birth defect that left him unable to eat normally. The boy was reportedly healed after his mother said she prayed to Acutis to intercede and help heal her son.
The second miracle attributed to Acutis relates to the reported healing of a girl from Costa Rica who had suffered a head trauma after falling from her bicycle in Florence, Italy, where she was studying. Her mother said she prayed for her daughter’s recovery at the tomb of Acutis in Assisi.
In the face of Israel’s far-reaching strikes Friday, it’s not clear that Iran – its longtime foe – has the capacity to muster the furious response that might be expected.
Israel has once again demonstrated it is the pre-eminent military and intelligence power in the Middle East, heedless to civilian casualties and the diplomatic impact of its actions on its allies.
As with their remarkable operation to decapitate their northern opponent – the Iranian proxy in Lebanon, Hezbollah – the overnight operation has the hallmarks of months or even years of preparation. And Prime Minister Benjamin Netanyahu may have been faced with using this capability now, or losing it, as diplomacy kicked in during a sixth round of nuclear talks scheduled for this weekend between the United States and Iran in Oman.
Iran is now left counting its far-reaching wounds. Images from across Tehran show apartment blocks hit, it seems, in specific rooms – suggesting the pinpoint targeting of individuals, likely through tracking cellphones. Iran has lost its top three active-duty commanders, as well as a leading voice in nuclear talks, overnight, but as the dust clears it may emerge more have been hit, and the survivors will likely be concerned they, too, could still be targeted.
This will slow and complicate any Iranian response. As will the damage the Iranians continue to sustain. A raid by Israel in October took out a large tranche of Iran’s air defenses. Israel’s military said Friday that it had destroyed dozens of radars and surface-to-air missile launchers in strikes by fighter jets on aerial defense arrays in western Iran. The Iranian atomic energy agency confirmed that the nuclear enrichment facility at Natanz had also been damaged, but it’s not yet clear to what extent.
In the days ahead, Israel’s superior intelligence apparatus will search for targets of opportunity – commanders and equipment changing location, or the movement of materiel to facilitate a response – and continue to strike.
Such a wide-ranging assault was possible only because Hezbollah – Iran’s second-strike capability if their nuclear apparatus was hit – had been dismantled over a ruthless but effective months-long campaign last summer. This is beginning to look like a months-long Israeli plan to remove a regional threat.
The risks remain high. Iran could now try to race for the nuclear bomb. But its faltering defenses and clear, humiliating infiltration by Israel’s intelligence, make that a long shot. Rushing to build a nuclear weapon is no simple task, especially under fire, with your key leadership at risk of pinpoint strikes. Netanyahu may have calculated that the risk of an Iranian nuclear breakout was depleted, and manageable with yet more military might.
There is another victim of the overnight barrage: the Trump administration’s standing as a geopolitical power.
There may be suggestions from Trump advocates in the hours ahead that the Israeli assault was part of a wider masterplan to weaken Iran ahead of more diplomacy. But, in reality, a simpler truth is revealed: Israel had no trust in the United States to implement a deal with Iran that would remove its nuclear ambitions.
Despite public pleading by US President Donald Trump for it to hold off, Israel went ahead with the most significant attack on Iran since its war with Iraq in the 1980s. Israel neither cared for or feared Trump’s response, and is apparently prepared to risk fighting on without US support.
That is perhaps another indictment of Iran’s ability to respond now. Israel is less bothered by what it can do. Israel’s operation against Hezbollah provides reason for it to be confident (but also should stir anxieties about hubris and overreach). Israel has likely hit the vast majority of its key targets already, to maximize the advantage of surprise, and the extent of that damage will take days to be revealed.
What of proliferation now? There is a lot that we do not know about Iran’s nuclear program. Israel may have known a lot more. But we are now in a binary moment where the strikes on the Natanz facility may either herald its end, or its race to completion – in the form of a nuclear weapon. Iran has always insisted its nuclear program is peaceful, but the United Nations’ nuclear watchdog on Thursday declared it in breach of its non-proliferation obligations, prompting Tehran to promise escalatory action.
In the moment of its greatest weakness, the Islamic Republic will struggle to project the regional swagger it has maintained for decades. It may feel it is unable to grasp diplomacy with the US as its way out, without looking even weaker. It appears unable to hit Israel back proportionately, so may look to strike asymmetrically, if possible.
In the immediate confusion, one basic fact is clear: Israel is acting in the Middle East now unimpeded by allies, unafraid of wider risks, and – at times brutally – seeking to alter regional dynamics for decades to come.
Shortly before sunrise in Iran on Friday, Israel launched the first strikes of its operation against the regime’s nuclear program.
That operation, called “Rising Lion,” had two prongs: Heavy airstrikes against at least one of Iran’s enrichment sites, and more targeted strikes in Tehran to decapitate the regime’s military leadership. It aimed to halt what Israel said was Tehran’s rapid progress in developing nuclear weapons.
Israel’s attack came after years of threats and days of heightened speculation – but without the United States’ blessing. The Trump administration stressed that Israel acted unilaterally and that Washington was “not involved.”
Israeli Prime Minister Benjamin Netanyahu said the operation would continue “for as many days as it takes” to eliminate Iran’s nuclear threat. Tehran, which insists its nuclear program is peaceful, says it has “no option but to respond.”
Here’s what you need to know.
Shortly after explosions rocked Tehran, Israel also struck elsewhere in the country. Israel’s military said it used jets to strike “dozens of military targets, including nuclear targets in different areas of Iran.”
An explosion was reported at Iran’s main enrichment facility in Natanz, about 250 kilometers (150 miles) south of Tehran.
The United Nations’ nuclear watchdog, the International Atomic Energy Agency (IAEA), confirmed that Natanz had been hit, but said it had not observed an increase in radiation levels in the area.
Rafael Grossi, the head of the IAEA, said other nuclear facilities in Iran – Isfahan, Bushehr and Fordow – were not impacted. The Fordow site is buried under a mountain, and is considered a much harder target for Israel.
In a televised address, Netanyahu said Israel had taken action to “roll back the Iranian threat to Israel’s very survival,” and said it would continue its operation for as long as it takes “to remove these threats.”
Netanyahu claimed that Iran had in recent years produced enough highly enriched uranium for nine nuclear weapons.
“Iran could produce a nuclear weapon in a very short time. It could be a year, it could be within a few months,” he said. “This is a clear and present danger to Israel’s survival.”
The Israel Defense Forces (IDF) also said it had destroyed Iran’s ballistic missile launch sites and stockpiles.
Several of the most important men in Iran’s military and its nuclear program were killed in Israel’s strikes.
Maj. Gen. Hossein Salami, head of the secretive Islamic Revolutionary Guard Corps (IRGC), was the highest-profile of those killed.
Israel also said it killed Maj. Gen. Mohammad Bagheri, chief of staff of Iran’s armed forces; Ali Shamkhani, a close aide to Iran’s Supreme Leader Ayatollah Ali Khamenei; and Ali Hajizadeh, commander of the IRGC’s air force.
Iran’s retaliation has already begun. The IDF said Tehran has fired more than 100 drones toward Israel and that Israeli defenses were working to intercept the drones.
Iran’s President Masoud Pezeshkian urged the Iranian people to remain unified and trust Iran’s leadership.
“The nation needs unity… more than ever,” he added.
After a series of lethal and embarrassing Israeli blows against the Iranian regime, it is not clear how Tehran might attempt to exact retribution.
Following previous Israeli attacks against Iran and its proxies in the region, Tehran fired back with huge salvos of ballistic missiles.
The Institute for the Study of War, a think tank in Washington DC, said this time it was “possible that Israel somehow disrupted Iran’s response by targeting Iran’s ballistic missile launch sites and stockpiles.”
The Trump administration – which has been pursuing a diplomatic path with Iran in recent weeks – sought to distance itself from Israel’s attack.
Secretary of State Marco Rubio said Israel’s actions were “unilateral.” Although Israel notified the US ahead of its strikes, Rubio said the US was “not involved” in the attack.
“Our top priority is protecting American forces in the region,” he added. Earlier this week, the US had made efforts to arrange the departure of non-essential personnel from various countries in the Middle East, leading to speculation that an Israeli attack on Iran could be imminent.
US President Donald Trump urged Iran to agree to a new nuclear deal “before there is nothing left,” suggesting that follow-up Israeli attacks on the country would be “even more brutal.”
Trump said he had given Iran “chance after chance” to make a deal. “JUST DO IT, BEFORE IT IS TOO LATE,” he wrote on Truth Social, his social media platform.
Under a 2015 nuclear deal struck by former US President Barack Obama, formally known as the Joint Comprehensive Plan of Action (JCPOA), Iran agreed to drastically limit its number of centrifuges and cap uranium enrichment at levels far below those required to make weapons, in exchange for sanctions relief.
But during his first term as president in 2018, Trump withdrew from the JCPOA, saying the “rotten structure” of the agreement was not enough to prevent Iran from developing a nuclear bomb. He ramped up sanctions on Iran and threatened to sanction any country that helped the regime to obtain nuclear weapons.
In his second term, Trump has revived efforts to strike a new nuclear deal with Iran. Just hours before Israel’s strikes, the president cautioned Israel against launching an attack while US-Iran talks are ongoing.
“As long as I think there is an agreement, I don’t want them going in because that would blow it. Might help it, actually, but also could blow it,” Trump said.
After decades of threats, Israel on Friday launched an audacious attack on Iran, targeting its nuclear sites, scientists and military leaders.
Israeli Prime Minister Benjamin Netanyahu said the operation had “struck at the head of Iran’s nuclear weaponization program.”
But international assessments, including by the US intelligence community, say that Iran’s nuclear program isn’t currently weaponized. Tehran has also repeatedly insisted it isn’t building a bomb.
Still, that doesn’t mean it couldn’t if it chose to.
Iran has spent decades developing its nuclear program and sees it as a source of national pride and sovereignty. It maintains the program is solely for peaceful energy purposes and plans to build additional nuclear power plants to meet domestic energy needs and free up more oil for export.
Nuclear plants require a fuel called uranium – and according to the UN nuclear watchdog, no other country has the kind of uranium that Iran currently does without also having a nuclear weapons program.
That has fueled suspicions that Iran isn’t being fully transparent about its intentions. Tehran has used its stockpile of weapons-grade uranium as a bargaining chip in talks with the United States, repeatedly saying it would get rid of it if US-led sanctions are lifted.
So, what exactly is uranium’s role in a nuclear weapon, and how far is Iran from weaponizing its program? Here’s what you need to know.
The US launched a nuclear program with Iran in 1957. Back then, the Western-friendly monarch – the Shah – ruled Iran and the two countries were still friends.
With backing from the US, Iran started developing its nuclear power program in the 1970s. But the US pulled its support when the Shah was overthrown during the Islamic Revolution in 1979.
Since the revolution, which transformed Iran into an Islamic Republic, Western nations have worried the country could use its nuclear program to produce atomic weapons using highly enriched uranium.
Iran has maintained that it does not seek to build nuclear weapons. It is a party to the UN’s Nuclear Non-Proliferation Treaty (NPT), under which it has pledged not to develop a bomb.
Here’s where its nuclear facilities are located.
At the heart of the controversy over Iran’s nuclear program is its enrichment of uranium – a process used to produce fuel for power plants that, at higher levels, can also be used to make a nuclear bomb.
In the early 2000s, international inspectors announced that they had found traces of highly enriched uranium at an Iranian plant in Natanz. Iran temporarily halted enrichment, but resumed it in 2006, insisting it was allowed under its agreement with the UN’s nuclear watchdog, the International Atomic Energy Agency (IAEA).
It prompted years of international sanctions against Iran.
After years of negotiations, Iran and six world powers in 2015 agreed to a nuclear deal that limited Iran’s nuclear threat in return for lighter sanctions.
The deal required Iran to keep its uranium enrichment levels at no more than 3.67%, down from near 20%, dramatically reduce its uranium stockpile, and phase out its centrifuges, among other measures.
Uranium isn’t bomb-grade until it’s enriched to 90% purity. And nuclear power plants that generate electricity use uranium that is enriched to between 3.5% and 5%.
It’s unclear how close Iran might be to actually building a nuclear bomb, if at all, but it has made significant progress in producing its key ingredient: highly enriched uranium. In recent years, it has sharply reduced the time needed to reach weapons-grade levels – now requiring just about a week to produce enough for one bomb.
In 2018, Trump pulled out of the Iran nuclear deal and initiated new sanctions on the regime to cripple its economy.
Tehran in turn said it would stop complying with parts of the agreement, and started increasing uranium enrichment and uranium stockpiles, and using advanced centrifuges.
It removed all of the IAEA equipment previously installed for surveillance and monitoring activities.
The Biden administration then kicked off more than a year of indirect negotiations with Iran aimed at reviving the deal, but those broke down in 2022.
In 2023, the IAEA said uranium particles enriched to 83.7% purity – close to bomb-grade levels – were found at an Iranian nuclear facility. Its stockpile of uranium enriched up to 60% had also grown to 128.3 kilograms, the highest level then documented.
And last year, the US shortened Iran’s so-called “breakout time” – the amount of time needed to produce enough fissile material for a nuclear weapon – “to one or two weeks.”
An IAEA report sent to member states late last month said Iran’s stock of 60% purity enriched uranium had now grown to 408 kilograms. That is enough, if enriched further, for nine nuclear weapons, according to an IAEA yardstick.
The IAEA has long accused Iran of violating its non-proliferation obligations, but on Thursday – for the first time in almost 20 years – its board passed a resolution officially declaring Iran in breach of those obligations. Iran promised to respond by escalating its nuclear activities.
Enrichment is a process that increases the amount of uranium-235, a special type of uranium used to power nuclear reactors or, in much higher amounts, to make nuclear weapons.
Natural uranium is mostly uranium‑238 – about 99.3%, which isn’t good for power or bombs. Only about 0.7% is uranium‑235, the part needed to release energy.
For nuclear energy use, that tiny amount of useful uranium-235 needs to be concentrated. To do this, uranium is first turned into a gas, then spun at high speeds in machines called centrifuges. These machines help separate uranium-235 from the more common uranium-238. That is what enrichment is.
Uranium used in nuclear power plants is typically enriched to about 3.67%. To make a nuclear bomb, it needs to be enriched to around 90%. Iran has enriched uranium to 60% – not enough for a bomb, but a major step closer to weapons-grade material.
Centrifuges are essential for enriching uranium. The more advanced the centrifuge, the faster and more efficiently it can separate uranium-235 from uranium-238 – shortening the time needed to produce nuclear fuel or, potentially, weapons-grade material. Iran has spent decades improving its centrifuge technology, starting with its first-generation IR-1 model in the late 1980s. Today, it operates thousands of machines, including advanced models like the IR-6 and IR-9.
According to the Arms Control Association, Iran’s current centrifuge capacity could allow it to produce enough weapons-grade uranium for a bomb in less than two weeks.
Israel says it’s targeting Iran’s nuclear infrastructure in its attack.
The nuclear complex there, about 250 kilometers (150 miles) south of the capital Tehran, is considered Iran’s largest uranium enrichment facility. Analysts say the site is used to develop and assemble centrifuges for uranium enrichment, a key technology that turns uranium into nuclear fuel.
The IAEA said three nuclear sites, Fordow, Isfahan and Bushehr, had not been impacted.
Six of Iran’s nuclear scientists were also killed in Israel’s strikes, Iranian state-affiliated Tasnim news agency said.
Some facilities are buried deep underground to put them out of reach of Israel’s weapons.