S&P 500 Found Support After The Sell-Off At The Start Of Today’s Session

Key Insights

• S&P 500 managed to get above the 4050 level as traders used the pullback as an opportunity to increase their long positions. 
• Treasury yields pulled back after the initial rally, providing material support to stocks. 
• A move above the resistance at 4070 will push S&P 500 towards the next resistance level at 4100.

S&P 500 Rebounds From Session Lows

S&P 500 found itself under strong pressure after the release of the better-than-expected Non Farm Payrolls report. In the premarket session, S&P 500 futures made an attempt to settle below the 4000 level.

The strong jobs data boosted chances for aggressive rate hikes from the Fed. U.S. dollar moved higher, while Treasury yields rallied after the release of the U.S. Non Farm Payrolls report.

However, stocks managed to gain upside momentum, and S&P 500 moved back above the 4050 level. The tech-heavy NASDAQ Composite, which is sensitive to changes in yields, has recently moved above the 11,400 level. These moves were driven by the pullback in Treasury yields.

It looks that traders believe that Non Farm Payrolls report will not change Fed’s thinking. The Fed is expected to slow the pace of rate hikes at the next meeting.

The market sentiment has clearly changed in the last hour as the U.S. dollar moved closer to multi-month lows after a brief rally that was triggered by the Non Farm Payrolls report.

Demand for the safe-haven dollar is not growing, so stocks may have a decent chance to finish the trading session in the positive territory. At the same time, it remains to be seen whether traders will be ready to take additional risk ahead of the weekend.

S&P 500 Is Moving Towards The Resistance At 4070

Currently, S&P 500 is trying to get to the test of the resistance at 4070. If S&P 500 manages to settle above this level, it will move towards the next resistance, which is located at the recent highs at 4100. A move above the resistance at 4100 will open the way to the test of the resistance at 4125.

On the support side, the nearest support level for S&P 500 is located at 4040. If S&P 500 moves back below this level, it will head towards the next support at 4015. A successful test of the support at 4015 will push S&P 500 towards the support level, which is located at today’s lows at 4000.

For a look at all of today’s economic events, check out our economic calendar.