S&P 500 Remains Under Pressure As Traders Stay Cautious

Key Insights

• S&P 500 is losing ground as traders are not ready to increase their risks ahead of the Fed meeting next week. 
• The pullbacks in Apple and Tesla put additional pressure on S&P 500.
• Energy stocks continue to move lower as oil price is down by 3% in today’s trading session. 

Tesla Stock Remains Under Strong Pressure

S&P 500 rebounded from session lows near the 3915 level and made an attempt to settle above 3960 as the stock market tried to stabilize after the recent pullback. However, S&P 500 failed to get above the 3960 level and moved closer to 3930.

The yield of 10-year Treasuries tested new lows near 3.40%, but this move failed to provide material support to stocks.

Tesla was down by more than 3% amid worries about demand for company’s cars. Apple declined by more than 1% as Morgan Stanley cut its iPhone estimates.

Energy stocks remained under pressure as the sell-off in the oil markets continued. The pullback was led by oil services companies Halliburton, Baker Hughes, and Schlumberger.

From a big picture point of view, traders remain worried about a potential global recession. At the same time, it should be noted that the safe-haven U.S. dollar has moved far away from yearly lows, while the pullback in Treasury yields in recent weeks has been strong.

It remains to be seen whether traders will be ready to increase their risks ahead of the Fed meeting. Thus, the market may stay choppy in the upcoming trading sessions, unless traders find a significant catalyst that would trigger a strong move.

S&P 500 Found Support At 3915

From a technical point of view, S&P 500 is trying to stabilize after the pullback, which was caused by profit-taking after the strong rally.

S&P 500 found support near the 50 EMA at the 3915 level. A successful test of this level will indicate that S&P 500 is ready for another strong move. In this scenario, S&P 500 may quickly test the next support levels at 3890 and 3860.

On the upside, S&P 500 needs to get back above the 20 EMA, which is located at 3865, to have a chance to gain sustainable upside momentum. A move above the resistance level at 3875, which is located near the 20 EMA, will show that S&P 500 is ready for the test of the psychologically important resistance level at 4000.

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