S&P 500 Daily Update for Tuesday April 1, 2025

Summary of the Daily Update for Monday, March 31, 2025, and the outlook for Tuesday, April 1, 2025:
Monday, March 31 Recap:
Market Performance: The market saw a bounce, closing up 0.55% on above-average volume, possibly due to end-of-month and end-of-quarter window dressing by institutions. Despite the positive close, the session started with a gap lower open and climbed steadily to close at the intraday high of 5613 (hitting resistance at the daily pivot).
Key Observations:
Growth stocks and mega caps underperformed, while value stocks and the broader S&P 500 (equal-weight version) showed more participation.
Interest rates dipped slightly (10-year yield at 4.25% from 4.26%), and the dollar was up.
Sentiment remained extremely negative (21 from 22), with the VIX at 22.28, still above 20.
The market was unsettled by upcoming tariffs (effective April 2-3) and President Trump’s proposed 20% universal tariff, causing hesitation.
Technical Indicators:
Short and intermediate trends remain negative; long-term trend is mixed.
The market is below the 20-period moving average, with the 50-period. The Aroon Indicator is extreme negative.
A non-confirmed Hindenburg Omen lingers, pending Tuesday’s close for confirmation.
The 10-to-3-month yield curve remains inverted, and momentum is negative (ADX red line above green).
Economic Data:
Chicago PMI: Came in at 47.6 (up from 45, better than expected but still below 50, indicating contraction).
Goldman Sachs Forecast: Predicts a 5% drop in the S&P over 3 months, but a 6% rise over 12 months to 5,900, with earnings expected to grow.
Market Internals:
Growth-to-value ratios weakened, with small and mid-caps showing persistent softness.
Defensive sectors (staples, utilities, financials) outperformed tech, discretionary, and communication sectors.
Volume was above average, likely due to quarter-end activity, but internals didn’t improve significantly.
Outlook for Tuesday, April 1:
Seasonality: Historically positive as the first day of a new month often sees capital deployment (71% up over the last 75 years in April).
Bias: Mixed, with some positive (intraday recovery, seasonality) and negative (weak internals, tariff concerns) factors balancing out.
Momentum: Remains negative overall.
Key Events:
Economic reports: S&P Global Manufacturing PMI, construction spending, ISM Manufacturing, and JOLTS job openings.
Tariff implementation continues to loom (effective April 2-3), potentially impacting sentiment.
Technical Levels: The market is above long-term support (5575) after closing at 5611, but still below key moving averages (20, 50, 200-day).
Broader Context:
Sentiment: Pessimism prevails, driven by tariffs and geopolitical uncertainty, though data isn’t as dire as emotions suggest.
Trends: Negative in the short and intermediate term, mixed in the long term due to a still-positive trend despite being below the 200-day moving average.
Sectors: Defensive positioning is evident, with staples and utilities leading, while growth (tech, discretionary) lags.
In summary, Monday showed a resilient bounce but lacked internal strength, and Tuesday’s outlook hinges on seasonality and upcoming data amidst ongoing tariff-related uncertainty.