Weekly Stock Market Update & SPY Technical Analysis
Investors are eager to return to the markets this week after the White House signaled that phones, computers, and chips will be excluded from Trump’s tariffs—a move that could push markets back toward their all-time highs. The technology sector accounts for more than 30% of the S&P 500, and that 30% played a major role in the 2024 rally, contributing to over 50% of the total gains.
What’s important to note about this market correction is that it wasn’t caused by economic weakness or a black swan event—it was politically driven. Great stocks found themselves caught in political rhetoric, which also came as a shock to the economic outlook but hasn’t had enough time to damage the current state of the economy. As of today, consumer sentiment may be low—the second-lowest reading in history—but other key data points haven’t raised red flags. The U.S. unemployment rate is still below 5%, GDP growth remains positive, and corporate earnings are strong. Considering all of this, if tariffs are no longer a threat, there’s no real reason for the market to continue dropping.
That said, it’s important to note that tariffs will still affect many items—so not everything is free and clear just yet. Companies will need to get creative and strategize new approaches to manufacturing and sourcing components. While tariff talks are ongoing, we’ll continue watching for developments that could impact the companies we're invested in or tracking for potential entry.
Aside from tariffs, last week brought new inflation data. The Consumer Price Index showed that the annual inflation rate fell to 2.4% in March, its lowest reading since September 2024. This is significant because it's now very close to the Fed’s target rate of 2%, which means an interest rate cut may be on the horizon. Trump has been pressuring the Fed to cut rates since taking office, which would ultimately stimulate economic growth and benefit businesses of all sizes.
Key Events to Watch This Week:
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U.S. Retail Sales (Wed)
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Earnings Reports: JNJ, BAC, ASML, TSM, NFLX
SPY Technical Analysis:
The Volatility Index (VIX) pulled back significantly last week, signaling that bearish activity on SPY may be fading. Other factors, such as an influx of SPY call buying and put selling, suggest that buyers are beginning to show interest again. With the positive news over the weekend, we may see SPY attempt a breakout above 550.00 in the coming weeks. We’ll be watching for high-probability setups across the market as charts continue to develop.
Last note,
Our strategy this week will be the same as last week, focused on capitalizing on the intraday volatility for day trades and scanning for reversal points to take on some swing trades, markets are setting up nicely after last week's push. Wanna join us for daily premium updates and set-ups? Click here!
UPDATE:
The Trump administration denied that there has been any exemption on tariffs, therefore the report previously released about an exemption for phones and semiconductors may no longer be valid. News has been very mixed recently so investors must stay alert for any additional updates. We'll be updating our team in real time throughout the week.