S&P 500 is likely to retrace some of yesterday’s losses, but is a short-term bottom in?
The S&P 500 index experienced a significant pullback yesterday, dropping 2.36% amid weekend activity from Trump and concerns over his clash with Fed Chair Powell. Fears about potential threats to Fed independence and the impact of tariff policies drove investors toward safe-haven assets.
Investor sentiment has slightly worsened, as shown in last Wednesday’s AAII Investor Sentiment Survey, which reported that only 25.4% of individual investors are bullish, while 56.9% are bearish.
The S&P 500 sold off below 5,200 yesterday, as we can see on the daily chart.
S&P 500 Futures Contract Rebounding
This morning, the S&P 500 futures contract is trading 0.8% higher, rebounding from yesterday’s low of around 5,127.
Key support is now around 5,100-5,150, marked by the recent fluctuations. Resistance is around 5,300.
Conclusion
The stock market appears to be finding some support after Monday's sharp decline. While uncertainty remains about whether we're seeing just a temporary bounce or a sustainable reversal, investors are now focusing on corporate earnings.
Earnings season is in full swing, with several major tech companies reporting this week. Tesla (TSLA) is scheduled to report after today's close, while Alphabet (GOOG) and Intel (INTC) will release earnings on Thursday, among others. These reports could significantly influence sentiment in the technology sector.
The market continues to be highly sensitive to trade policy developments, and volatility is likely to persist.
Here’s the breakdown:
- Market moved lower after the Powell-Trump tension escalated.
- S&P 500 is expected to open 0.8% higher today.
- Investors await Tesla (TSLA) report scheduled for release after the close today.
- It remains a news-driven market, with tariff developments in focus.
The full version of today’s analysis - today’s Stock Trading Alert - is bigger than what you read above, and it includes the current S&P 500 position. I encourage you to subscribe and read the details today (with a single-time 7-day free trial). Stock Trading Alerts are also a part of our Diamond Package that includes Gold Trading Alerts and Oil Trading Alerts.
And if you’re not yet on our free mailing list, I strongly encourage you to join it - you’ll stay up-to-date with our free analyses that will still put you ahead of 99% of investors that don’t have access to this information. Join our free stock newsletter today.
Thank you.
Paul Rejczak
Stock Trading Strategist