Are Stock Prices Reaching Their Peak?
The S&P 500 index saw a 1.47% increase on Friday, building on its recent uptrend driven by better-than-expected economic data. Despite concerns about the impact of new tariffs and their potential effects on corporate earnings, the market continues to rise.
However, this morning, U.S. stock prices are slightly lower as investors process the latest trade-related news from President Trump and prepare for the upcoming Federal Reserve meeting on Wednesday. Investor sentiment has soured, with only 20.9% of individual investors feeling bullish, while 59.3% are bearish.
The S&P 500 is nearing its local highs from late March, as indicated by the daily chart. Let’s take a closer look at recent market trends:
S&P 500: Another Weekly Advance
- The S&P 500 surged 2.92% last week, following a 4.6% rally the previous week.
- Uncertainty looms over whether this uptrend will continue or if it’s just a correction within a broader downtrend.
- With the tech earnings season wrapping up, the market may experience a period of correction or consolidation.
Nasdaq 100 Breaks 20,000 Level
- The Nasdaq 100 index closed 1.60% higher on Friday but is expected to dip back below the 20,000 level.
- President Trump’s announcement of new tariffs on foreign films has impacted tech stocks like Netflix, Disney, and Warner Bros Discovery.
VIX Extends Declines
- The VIX, a measure of market volatility, dropped again on Friday, indicating growing investor confidence despite trade and economic concerns.
- Historically, a declining VIX suggests less fear in the market, but it could also signal a potential market reversal.
S&P 500 Futures Contract: Pulling Back Below 5,700
- This morning, the S&P 500 futures contract retreated below the 5,700 level.
- The resistance level is around 5,700-5,720, with support at 5,600 based on recent lows.
In conclusion, while the S&P 500 is expected to pull back today, the overall trend remains uncertain. With major earnings reports behind us, investors will focus on economic data and central bank policies. It’s crucial to maintain disciplined risk management as market volatility is expected to increase leading up to the Fed meeting on Wednesday.
Key Takeaways:
- The S&P 500 saw a 1.47% gain on Friday.
- Tech stocks may face a pullback after a strong rally.
- Keep an eye on the Federal Reserve’s interest rate decision on Wednesday.