S&P 500 Heads Towards The 4000 Level As Treasury Yields Decline

Key Insights

• Lower Treasury yields and weaker dollar provided significant support to stocks. 
• Energy and basic materials stocks led the rebound. 
• Best Buy rallied after beating analyst estimates. 

Energy Stocks Rebound As WTI Oil Moves Towards The $82 Level

S&P 500 moved towards the 4000 level as energy stocks rebounded after yesterday’s pullback. Marathon Petroleum, APA Corporation, and Hess Corporation were up by 5% in today’s trading session.

Basic materials stocks, including the copper producer Freeport-McMoRan and the fertilizer producer Mosaic, have also gained strong upside momentum today.

Best Buy was the biggest gainer in the S&P 500 today. The stock gained 11% after the retailer beat analyst estimates, raised full-year guidance and resumed its buyback program.

Meanwhile, Dollar Tree declined by 9% as traders focused on the disappointing earnings forecast.

The tech-heavy NASDAQ Composite gained 0.8% as tech stocks moved higher. Interestingly, Tesla managed to move away from yearly lows despite worries that it could cut prices in China due to weak demand.

From a big picture point of view, the rebound was broad, and all market segments managed to gain upside momentum in today’s trading session. Weaker U.S. dollar and lower Treasury yields provided material support to stocks today.

S&P 500 Tries To Get Out Of The Recent Trading Range

S&P 500 failed to develop downside momentum in recent trading sessions and managed to get back above the 3960 level. To continue its rebound, S&P 500 must settle above the resistance at 4000.

RSI remains in the moderate territory, so there is plenty of room to gain upside momentum in case the right catalysts emerge. However, it remains to be seen whether S&P 500 will be able to gain significant momentum ahead of Thanksgiving. Usually, many traders take a break at this time of the year, so trading volume declines.

The current setup looks bullish as S&P 500 managed to stabilize in the wide 3920 – 4000 range after the strong rally. In case S&P 500 manages to settle above the 4000 level, it will have a great chance to get to the test of the important resistance level near the recent highs at 4040. A move above this level will signal that S&P 500 is ready for a strong move.

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