Was Friday’s pullback just a brief correction before another leg higher?
Stock prices pulled back on Friday, with the S&P 500 closing 0.67% lower following President Trump’s surprise announcement of tariffs targeting Apple and the European Union. However, the index rebounded from its daily low of 5,767.41 and closed slightly above the 5,800 mark.
Today, the S&P 500 is expected to open 1.4% higher, fueled by news that President Trump has delayed the implementation of tariffs on Europe.
Investor sentiment has also improved, as reflected in last Wednesday’s AAII Investor Sentiment Survey, which reported that 37.7% of individual investors are bullish, while 36.7% are bearish.
While Friday’s pullback retraced some of the recent gains, the index remains well above its early May consolidation.
S&P 500 Futures: Trading Around 5,900
This morning, the S&P 500 futures contract is trading near local highs, approaching the 5,900 level after a strong rebound yesterday.
Support remains around the 5,750–5,800 level, marked by previous price fluctuations, while resistance is at 5,950.
Conclusion
Tuesday’s trading session is set to open on a positive note for the S&P 500. The key question is whether this marks the beginning of a new leg higher or simply a continuation of the consolidation.
For now, I think that the market is likely to move sideways, as investors await Nvidia's important quarterly earnings report, scheduled for release on Wednesday after the market closes.
Here’s the breakdown:
- Tariffs continue to drive market sentiment, but today's open looks bullish.
- Investors are focused on Nvidia’s earnings report due Wednesday after the close.
- The 6,000 level remains a key resistance.
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Thank you.
Paul Rejczak
Stock Trading Strategist
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