S&P 500 Daily Update for Wednesday August 20, 2025

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Market Update Summary for Tuesday, August 19, 2025:
Outlook for Wednesday, August 20, 2025:
Tuesday Market Recap:
Market Performance: The S&P 500 experienced a down day, with the NASDAQ, and NASDAQ 100 declining, while the Dow set an intraday all-time high but closed only slightly positive. Growth stocks underperformed value stocks, indicating a defensive shift in the market.
Price Action: The S&P 500 opened lower, saw dip-buying early, but deteriorated after lunch, breaking below support levels (S1 at 6439, S2 at 6430, S3 at 6412). It closed slightly below S3, near the psychological 6,400 level, which acted as support.
Volume: Below average, typical for summer, suggesting low conviction.
Technical Indicators:
The S&P 500 remains above the 20-period moving average, except for one day on August 1, indicating short-term support.
Growth-to-value ratios show a shift to value, with large, mid, and small-cap growth underperforming value. Will it continue?
Momentum indicators (e.g., stochastics, ADX) weakened, but the market remains positive across short, intermediate, and long-term timeframes.
Volatility (VIX) ticked up to the mid-15s, signaling potential for increased market movement.
Sector Performance: Defensive sectors (real estate, staples, utilities, healthcare) outperformed, while tech, discretionary, and communication lagged. Mega-cap tech stocks (e.g., NVIDIA -3.5%, Netflix -2.5%) saw profit-taking but remained above key moving averages.
Economic Context:
Housing starts rose 5.2% month-over-month (1.428M annually, above expectations), but building permits fell 2.8% (1.354M, below expectations).
Inflation concerns persist, with CPI stable but PPI showing inflationary pressure. The market is stuck around 3% inflation, not the Fed’s 2% target.
Interest rates dropped slightly (10-year yield at 4.3%), with the dollar above its 50-day moving average but in a downtrend.
Market Sentiment and Dynamics:
Defensive Shift: The S&P 500 is turning defensive ahead of Federal Reserve Chair Jerome Powell’s speech at Jackson Hole on Friday, August 22, 2025. Investors recall 2022 when Powell’s hawkish comments triggered a more convicted bear market.
Overhead Resistance: The S&P struggles to break above the 6,468 level, with NASDAQ and NASDAQ 100 also facing resistance.
Geopolitical and Policy Factors: The market is largely ignoring Russia-Ukraine peace talks and potential trade deal/tariff developments until concrete outcomes emerge.
Wednesday Outlook (August 20, 2025):
Key Events:
FOMC meeting minutes release at 2 p.m. ET, which the market will analyze for Fed policy clues.
MBA Mortgage Applications Index release.
Retail earnings reports may influence sentiment.
Seasonal Trends: The S&P is neutral to negative, while the Dow is neutral to positive. Post-election year weakness may persist into September/October.
Technical Levels: Watch the 20-period moving average for support, particularly for the NASDAQ 100 (QQQ), which is already testing this level.
Market Bias: Negative bias due to Tuesday’s decline, but momentum remains positive pending further confirmation of a defensive shift.
Conclusion:
The S&P 500 remains positive across all timeframes but is showing signs of weakness, with a defensive shift from growth to value and persistent overhead resistance. Investors are focused on Powell’s upcoming speech, which could either confirm the defensive posture or spark a rally if perceived positively. Key levels to watch include the 6,400 support level for the S&P and the 20-period moving average for potential support or breakdown.

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!