The S&P 500 index gained 0.27% on Thursday, reaching a marginally higher all-time high of 6,290.22. The market is continuing its short-term consolidation. Today, it is set to open about 0.5% lower, as indicated by futures, in response to overnight news regarding a 35% tariff on Canada.
Investor sentiment remains elevated, as reflected in the Wednesday’s AAII Investor Sentiment Survey, which reported that 41.4% of individual investors are bullish, while 35.6% are bearish.
The S&P 500 continues to trade near its all-time high, as the daily chart shows.
The Nasdaq 100 closed 0.16% lower on Thursday, underperforming the broader market. Currently, the index appears to be consolidating within an ongoing uptrend. While no negative signals have emerged, the price action may be forming a potential topping pattern.
Yesterday, the Volatility Index (VIX) dropped to a new local low of 15.70, further supporting the strength of the equity rally.
Historically, a dropping VIX indicates less fear in the market, and rising VIX accompanies stock market downturns. However, the lower the VIX, the higher the probability of the market’s downward reversal. Conversely, the higher the VIX, the higher the probability of the market’s upward reversal.
This morning, the S&P 500 futures contract is trading slightly below 6,300 after rebounding from an overnight dip caused by Trump’s tariff announcement. The market remains in a consolidation, which could represent a topping pattern or a flat correction before another leg higher.
Resistance remains around 6,320, with support near 6,250.
Markets remain highly sensitive to geopolitical developments and could stay volatile in the near term.
Crude oil closed 2.65% lower on Thursday, falling below the $67 level and extending its recent consolidation. The decline followed a surprise inventory build. Despite the setback, recent price action still marks a rebound from the sharp June 23–24 sell-off. Oil is trading 0.9% higher this morning.
For oil markets specifically, these developments are worth monitoring:
Although crude is trading higher this morning, the rebound only recovers a portion of Thursday’s losses. Key support remains around $66-67, with resistance near $69. The current trend appears mildly bullish or simply a continued consolidation following the June sell-off.
My short-term outlook on oil remains neutral, and no positions are currently justified from a risk/reward standpoint.
The S&P 500 is expected to open lower today, pulling back from Thursday’s record high. While there are no clear bearish signals, some short-term profit-taking is possible. Investors are turning their focus to the upcoming quarterly earnings season, which kicks off next week with major banks reporting.
Last Tuesday, I noted “I think that in the short term, overbought technical conditions may lead to a period of consolidation or a mild pullback. However, no clear bearish signals are currently evident”. That outlook remains valid.
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Paul Rejczak
Stock Trading Strategist
Stock market strategist, who has been known for the quality of his technical and fundamental analysis since the late nineties.