Will strong jobs data push stock prices higher?
Stock prices retreated on Thursday, with the S&P 500 closing 0.53% lower, following an internet feud between Donald Trump and Elon Musk that contributed to a sell-off in Tesla (TSLA). However, this move appears to be part of a broader consolidation. Today, the S&P 500 is set to open 0.8% higher following the release of monthly jobs data.
Investor sentiment remains mixed, as reflected in the Wednesday’s AAII Investor Sentiment Survey, which reported that 32.7% of individual investors are bullish, while 41.4% are bearish.
The S&P 500 continues to trade within a key resistance zone between 5,900 and 6,000.
Nasdaq 100 Pulled Back from New Its High
The Nasdaq 100 fell 0.80% after reaching a local high of 21,891.89 - the highest since February 21. The index had been retracing its earlier decline from the February 19 record high of 22,222.61, Thursday’s pullback signals that more uncertainty may lie ahead.
Support is around 21,500, while resistance is at 22,000-22,200.
VIX Continues to Fluctuate
The Volatility Index (VIX) dropped to a local low of 17.08 on Thursday before rebounding and closing near 18.5. It continues to reflect moderate investor fear.
Historically, a dropping VIX indicates less fear in the market, and rising VIX accompanies stock market downturns. However, the lower the VIX, the higher the probability of the market’s downward reversal. Conversely, the higher the VIX, the higher the probability of the market’s upward reversal.
S&P 500 Futures: Higher After Jobs Data
This morning, the S&P 500 futures contract is trading near the 6,000 level after rebounding from a local low around 5,929. Sentiment improved following the stronger-than-expected Nonfarm Payrolls number, especially after concerns raised by a weaker ADP employment report on Wednesday.
The nearest support is now near 5,930, while resistance is at the 6,000-6,020 mark.
Conclusion
Friday’s trading session may bring some bullish momentum following Thursday’s volatility. I think that continued consolidation is likely as markets digest recent economic data, tariff developments, and the Trump-Musk clash - all contributing to uncertainty.
Here’s the breakdown:
- Despite Thursday’s pullback, the S&P 500 remains below the psychological 6,000 level.
- No clear negative signals yet, but sideways consolidation may continue amid tariff concerns.
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Paul Rejczak
Stock Trading Strategist
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