S&P 500 Pulls Back As Traders Take Profits After Yesterday’s Rally

Key Insights

• S&P 500 failed to settle above the 4100 level and pulled back as traders took some profits off the table after the strong rally. 
• The disappointing ISM Manufacturing PMI report served as a catalyst for the pullback. 
• Meanwhile, the weak dollar and lower Treasury yields provided some support to stocks. 

S&P 500 Is Losing Ground In Choppy Trading

S&P 500 rebounded from session lows and made an attempt to settle above the 4080 level. The tech-heavy NASDAQ Composite was mostly flat in today’s trading.

Today, traders reacted to the ISM Manufacturing PMI report, which indicated that ISM Manufacturing PMI declined from 50.2 in October to 49 in November, compared to analyst consensus of 49.8. The report triggered a pullback, pushing the S&P 500 towards the 4050 level.

However, S&P 500 failed to develop sustainable downside momentum. Traders used the pullback as an opportunity to increase long positions, and S&P 500 rebounded towards the 4080 level before falling back to 4070.

It looks that the significant weakness of the U.S. dollar, which is down by more than 1% against a broad basket of currencies, served as an important positive catalyst that provided material support to S&P 500. Treasury yields moved to new lows today, which was also bullish for stocks. These positive catalysts were offset by profit-taking after the recent rally.

PVH was the biggest gainer in the S&P 500 today after the company beat analyst estimates on both earnings and revenue.

Among losers, Salesforce was down by 10% despite beating analyst estimates as the company’s co-CEO Bret Taylor announced his departure.

Right now, the key question is whether traders will be ready to keep their long positions ahead of tomorrow’s Non Farm Payrolls report. The report is expected to show that the U.S. economy added 200,000 jobs in November.

S&P 500 Attempts To Settle Back Above The 4070 Level

S&P 500 is currently trying to stay above the 4070 level. If S&P 500 manages to settle above this level, it will have a chance to get to the test of the 4100 level. A move above 4100 will push S&P 500 towards the resistance at 4125. In case S&P 500 climbs above 4125, it will head towards the next resistance at 4160.

On the support side, a move below 4070 will push S&P 500 towards the support level at 4040. A successful test of the support at 4040 will open the way to the test of the next support level, which is located at 4015.

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