Will stocks continue their rebound, or is this just a pause before another leg down?
The stock market reacted to yesterday’s FOMC interest rate decision, with the S&P 500 advancing 1.08% after retreating from an intraday high above 5,700. However, it failed to break out of its short-term consolidation. This morning, futures indicate a 0.5% lower opening, suggesting continued consolidation following recent declines.
Investor sentiment remains bearish, as shown in yesterday’s AAII Investor Sentiment Survey, which reported that 21.6% of individual investors are bullish, while 58.1% of them are bearish.
The S&P 500 remains in consolidation, as we can see on the daily chart.
S&P 500 Futures Contract: Hovering Near 5,700
This morning, the S&P 500 futures contract (June series) is trading slightly above 5,700, having pulled back from yesterday’s daily high of around 5,771. This appears to be part of a consolidation within last week’s rebound. Currently, resistance is at 5,780–5,800, while support is at 5,680-5,700, the prior resistance.
Conclusion
Stocks are expected to open lower today following yesterday’s pullback from intraday highs. The market has sold off sharply in recent weeks, and it may now consolidate or attempt a more meaningful upward correction.
Given rising geopolitical uncertainty and worsening investor sentiment, no clear positive signals are evident. It seems the bull market may be due for a longer pause.
Quoting my Stock Price Forecast for March 2025 “the stock market is poised for a positive start to the month, though this may simply be another part of its medium-term consolidation. The S&P 500 keeps fluctuating following its post-election rally.”
For now, my short-term outlook is neutral.
Here’s the breakdown:
- The S&P 500 is likely to extend its short-term consolidation.
- The FOMC decision triggered volatility, but overall, the market remains range-bound.
- In my opinion, the short-term outlook is neutral.
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Thank you.
Paul Rejczak,
Stock Trading Strategist