S&P 500 Daily Update for Wednesday April 2, 2025

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Summary of the "Daily Update" for Tuesday, April 1st, 2025, covering market action and the outlook for Wednesday, April 2nd:
On Tuesday, April 1st, the market experienced a choppy day with a modest bounce, closing up 0.38% on below-average volume. The day started with a lower open, dipped below the daily pivot of 5576, and fell below 5,600 before late-day buying pushed it back above the unchanged level. However, there was little conviction, driven by ongoing uncertainty about upcoming tariffs (set to begin April 2nd and 3rd) and their economic impact. Interest rates dropped to a 10-year yield of 4.16% (from 4.25%), but this didn’t significantly boost stocks. The VIX remains elevated at 21.77, signaling continued apprehension, while sentiment remains extreme negative at 19. Growth outperformed value slightly, particularly in mega caps, but the growth-to-value ratio showed no major shift. Trends remain negative in the short and intermediate term, mixed in the long term, with momentum also negative.
Economic data was mixed: ISM manufacturing fell to 49 (below the expected 49.8), indicating contraction, while global U.S. manufacturing edged up to 50.2 (slight expansion). The JOLTS job openings dropped to 7.568 million (from 7.762 million), and construction spending rose 0.7% (beating the expected 0.4%). These figures raised stagflation concerns—high inflation with weak growth. The dollar rose. Goldman Sachs estimates a 35% recession probability.
For Wednesday, April 2nd, the outlook remains cautious. The market lacks clear direction, with no extreme signals either way. Key reports such as the ADP employment change and factory orders, alongside tariff developments, could sway sentiment. Seasonality suggests April 2nd is typically positive, but post-election years muddy this trend. Technical indicators are mixed: short and intermediate trends are negative, long-term trends are holding support, and the Smart Money Indicators are positive, though the broader momentum and volume remain weak.
In short, Tuesday reflected a hesitant market grappling with tariff uncertainty and mixed economic signals, with Wednesday likely to hinge on fresh data and tariff news amid a lack of strong conviction.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/1dvsdU0xT5N1ej6ecoLVja7_vl0Au9yCq/view?usp=sharing

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