Nasdaq 100 and S&P 500: Tech Stocks Surge as US Indices React to Powell, Trump

Stocks Push Higher as Powell and Trump Drive the Rally

The major U.S. stock indexes are pushing higher into the mid-session on Tuesday, with the blue chip Dow up over 500 points and the tech-heavy S&P 500 and Nasdaq up more than 1%. The price action from the opening to now suggests the buying has been steady throughout the session. I think yesterday’s comments from Fed Chair Powell and today’s remarks from President Trump are the two main themes driving prices higher today.

Technical Outlook

Technically, the S&P 500 Index (SPX) is in a downtrend, and in a position to finish March sharply lower. We really can’t read much into today’s rally except that it seems reactive rather than the start of a major rally. Some may read it as end of the month position-squaring, or late quarterly rebalancing, I can tie it back to Powell and Trump.

The index is currently trading in between a long-term bottom at 6212.69 and a key retracement zone at 6483.01 to 6566.52. Not a significant area on the charts, but one with plenty of room to try to form a support base.

The most important technical development is that the SPX is trading on the bearish side of both the 200-day moving average at 6638.17 and the 50-day moving average at 6791.98. As long as the index remains in this position, traders are likely to be in “sell the rally” mode. And there is plenty of room to the downside if yesterday’s low at 6316.91 fails.

Furthermore, I believe there are plenty of shorts in the market that would still have to cover before we’ll even see a constructive support base.

Powell Stopped the Selling and Shifted Rate Expectations

Fundamentally, I think Fed Chair Powell’s comment that rates are in a good place and there is no urgency to move higher, even with oil prices rising, may have stopped the selling on Monday. His remarks have already shifted rate hike expectations and traders are now pricing in very little chance of a hike this year.

The move has already impacted the market. As rate pressure eased, buyers stepped back in, especially in growth and tech stocks, which had been under pressure all month.

Trump’s Iran Comments Are Lifting Sentiment Across the Board

The second factor supporting the SPX today is geopolitical. In my opinion, reports that Trump is open to winding down the war with Iran are helping to lift sentiment across all the major indexes. I don’t think that investors are thinking about the end of the war today, but rather the thought that tensions could be eased has been enough to bring in some fresh buyers.

Big tech names like Nvidia and Microsoft are moving higher at the midsession with money rotating back into areas that were hit the hardest in March during the war. But before we can get too excited, consider that oil is still over $100 a barrel, indicating that the situation is still active even after Trump’s comments.

This Market Is Still Headline Driven — Stay Alert

Looking ahead, today’s early price action suggests the stock market is being driven by headlines, which means investors should still be on their toes for dramatic shifts. Furthermore, if rate pressure stays low and geopolitical tension continues to ease, this market could be strong into the close. If either shifts, momentum could fade quickly.

More Information in our Economic Calendar.