The broad stock index lost 0.47% on Tuesday as it got back below the 4,400 level. On Friday, the market rallied to its new medium-term high of 4,448.47. It further extended an uptrend after breaking above the previous local highs in late May. On Friday, the S&P 500 was the highest since April of 2022.
However, the S&P 500 retraced its intraday advance and on Tuesday it further extended a correction following long holiday weekend. There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but overall, the investors’ sentiment remains bullish.
The S&P 500 will likely open 0.2% lower this morning. The index may fluctuate ahead of the important Fed Chair Powell’s testimony at 10:00 a.m. The S&P 500 broke slightly below its upward trend line as we can see on the daily chart:
Futures Contract Trades Sideways
Let’s take a look at the hourly chart of the S&P 500 futures contract. It rallied up to around 4,500 level on Friday. Since Monday it’s has been trading below the 4,450 level. The resistance level is at 4,500 and the support level is at 4,000-4,420, among others.
Conclusion
Stocks are expected to open slightly lower this morning, but the market will be volatile following the Fed Chair Powell’s testimony at 10:00 a.m. There have been no confirmed negative signals so far. However, stocks may extend a profit-taking action after their last week’s rally.
Here’s the breakdown:
- The S&P 500 will extend its consolidation following last week’s advances.
- There have been no confirmed negative signals so far.
- In my opinion, the short-term outlook is bullish.