The S&P 500 extended its gains, but further upside appears limited.
The S&P 500 Index closed 0.58% higher on Tuesday, reaching its highest level since early March with an intraday high of 5,981.35. This morning, the ADP Non-Farm Employment Change data was released, showing a significantly weaker-than-expected increase of only +37,000 jobs. As a result, expectations ahead of today’s market open are slightly negative, with the futures contract trading 0.1% lower.
Investor sentiment has deteriorated, as reflected in the last Wednesday’s AAII Investor Sentiment Survey, which reported that 32.9% of individual investors are bullish, while 41.9% are bearish.
The S&P 500 remains in a key resistance zone between 5,900 and 6,000.
Nasdaq 100 Breaks Above 21,500
The Nasdaq 100 gained 0.79% on Tuesday, closing at its highest level since early March and continuing to retrace more of its decline from the February 19 record high of 22,222.61. Today, it is expected to open 0.1% lower. Support is now at 21,500, while resistance is at 22,000-22,200.
VIX Continues to Decline
The Volatility Index closed below the 18 level yesterday, reflecting a low level of market 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: Uncertainty Below 6,000
This morning, the S&P 500 futures contract is once again pulling back from the key 6,000 level, following weaker jobs data that has dampened sentiment ahead of Friday’s important monthly employment report.
Key support remains near 5,850 (recent lows), while resistance is at the 6,000 mark.
Conclusion
Last Friday, my outlook was confirmed, as I noted that “the S&P 500 is likely to remain in consolidation today. Being the final trading day of the month, we may see some “window dressing” into the close - which could offer support to the bulls”.
Despite Tuesday’s advance, upside momentum remains constrained. Investors are now closely watching upcoming economic releases, including today’s ISM Services PMI at 10:00 a.m.
Here’s the breakdown:
- The S&P 500 continues to consolidate below the key 6,000 resistance level.
- No clear negative signals yet, but sideways consolidation may continue amid tariff concerns.
- The market is awaiting a series of economic data releases.
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Paul Rejczak
Stock Trading Strategist
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