Weekly Stock Market Update & SPY Technical Analysis
May turned out to be a strong month for the markets, as stocks rebounded from the sharp sell-off following Trump’s "Liberation Day" announcement. However, tariffs continue to weigh heavily on investor confidence as we enter a new month. Just moments after the market closed on Friday, Trump announced plans to double the existing 25% tariff on steel imports to 50%, reigniting fears of rising costs—especially in sectors like automotive and heavy machinery.
Despite last week’s inflation data showing a drop to the lowest levels in years, many Americans remain concerned that tariffs will eventually drive prices higher. Experts have echoed these concerns in their recent forecasts. The economy has already felt the pressure: Q1 U.S. GDP contracted by -0.2%, partly due to a surge in imports from companies stockpiling goods ahead of the tariff pause expiration. Meanwhile, consumer confidence remains weak at 52.2, near its lowest level since the 1980s.
It’s fair to say the tariff dispute won’t be ending soon, as Trump and his administration continue to use these levies as a negotiating tool. That said, the market appears less reactive to tariff headlines than in the past. While the initial shocks were significant, investors now seem to be focusing more on concrete data—particularly company earnings and inflation metrics. This past earnings season was strong overall, but many companies expressed uncertainty regarding future guidance. And although inflation appears under control for now, tariffs could eventually push prices higher—but that remains to be seen.
Key Economic Events This Week:
- Mon: Construction Spending Report – a useful gauge of economic health
- Mon: Fed Chair Powell Remarks
- Wed: ADP Employment Report
- Wed: Fed Beige Book
- Thu: U.S. Trade Deficit
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Fri: U.S. Unemployment Rate
The most impactful events will likely be Powell’s remarks and Friday’s unemployment data. Powell is known to move markets with his speeches—depending on his tone, we could see a rally or a pullback. We'll be watching closely, especially after his recent meeting with Trump. Meanwhile, the unemployment rate is a critical measure of economic strength. With GDP already contracting, a sudden uptick in unemployment could confirm that a recession is unfolding.
SPY Technical Analysis
SPY posted a strong performance in May, but buying momentum appeared to slow in the latter half of the month. Many investors anticipated the rally would continue, but buyers struggled to push the index back above the psychological 600.00 level. That said, SPY managed to hold a consolidation range near monthly highs and is expected to open within a healthy range to start June.
Key technical levels to watch:
- Support Zone: 567.00–577.00
- Breakout Level for All-Time High Retest: 598.31
There's a lot to look forward to this week and in June. We'll be updating events in real-time for our premium members. Click here to learn more.