Stocks: Will this advance continue?

S&P 500 is set to open higher, but will it break key resistance levels?

The S&P 500 closed 2.51% higher on Tuesday, retracing Monday's sell-off as sentiment improved due to calming comments from the administration regarding tariff talks, a potential Russia-Ukraine deal, and incoming corporate earnings. Stocks have recovered from their recent pullback, and today, the S&P 500 is expected to open 2.3% higher.

Tesla's earnings report after yesterday's close has further boosted market sentiment. Investors are now awaiting the Flash PMI releases at 9:45 a.m. and Treasury Secretary Bessent's speech at 10:00 a.m. The market remains in consolidation following the early April selloff, with 5,500 continuing to act as an important resistance level for the S&P 500.

Investor sentiment has slightly worsened, as shown in last Wednesday’s AAII Investor Sentiment Survey, which reported that only 25.4% of individual investors are bullish, while 56.9% are bearish.

The S&P 500 is likely to rise back above 5,400, as we can see on the daily chart.

Nasdaq 100 – Set to open almost 3% higher

The Nasdaq 100 closed 2.63% higher on Tuesday, rebounding from Monday's local low of around 17,600. Today, sentiment continues to improve following Tesla's (TSLA) earnings report. After Tuesday's close, the electric vehicle manufacturer reported first-quarter profits from its core auto business that exceeded the market's low expectations. The stock is up by almost 7% in premarket trading.

For the Nasdaq 100, resistance remains around the 18,800-19,200 range, while support is at approximately 18,000.

VIX pulling back

The VIX retreated to a local low of around 30 yesterday while remaining elevated. Today, it's likely to dip below 30 as investor fear subsides and stock prices rise.

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.

S&P 500 futures contract rallies

This morning, the S&P 500 futures contract is trading 2.3% higher, extending its rebound from Monday’s low of around 5,127.

Key resistance is now around 5,500-5,550, with support at 5,300. The market is advancing, though this movement remains within its two-week consolidation.

Conclusion

The stock market has found support after Monday's sharp decline. While uncertainty persists about whether we're witnessing a temporary bounce or a sustainable reversal, investors are now focusing on corporate earnings, further developments in tariff negotiations, and peace talks.

Earnings season is in full swing, with several major tech companies reporting this week. Alphabet (GOOG) and Intel (INTC) will release earnings tomorrow. These reports could influence sentiment in the technology sector.

The market continues to be highly sensitive to trade policy developments, and volatility is likely to persist.

Here’s the breakdown:

• S&P 500 is expected to open 2.3% higher today, as worries continue to ease.

• Investors are awaiting economic data releases and Treasury Secretary Bessent's speech at 10:00 a.m.

• It remains a news-driven market, with tariff developments in focus.

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