Will stocks continue their rebound ahead of the Fed’s announcement tomorrow?
Stocks extended their rebound from Friday yesterday, with the S&P 500 reaching a local high of 5,703.5 and closing 0.64% higher. However, this appears to be an upward correction within a broader downtrend. Much will depend on the market’s reaction to the FOMC interest rate decision tomorrow, as well as geopolitical developments.
Today, the S&P 500 is expected to open 0.2% lower, likely moving sideways following its rebound. Has the downtrend reversed? Likely not, but the market may see a correction after recent declines.
Investor sentiment remained bearish last week, as shown in last Wednesday’s AAII Investor Sentiment Survey, which reported that only 19.1% of individual investors are bullish, while 59.2% of them are bearish.
The S&P 500 retraced some of its recent losses, as we can see on the daily chart.
S&P 500 Futures Contract: Fluctuations Following Advance
This morning, the S&P 500 futures contract (June series) is trading above the 5,700 level after breaking above its downward trendline on Friday. Potential resistance is at 5,750–5,800, marked by recent price fluctuations.
Conclusion
Stocks are likely to begin today’s trading session on a slightly negative note, pulling back after the rebound.
The market has sold off sharply in recent weeks, and it may now consolidate or attempt a more meaningful upward correction. Investors are awaiting the key FOMC Interest Rate Decision tomorrow
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 expected to extend its fluctuations after Friday’s rebound.
- Investors are awaiting the Fed’s announcement tomorrow.
- In my opinion, the short-term outlook is neutral.
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Paul Rejczak,
Stock Trading Strategist