Positive news environment to help S&P 500 regain ground to level 5970

Last week, the S&P 500 index updated its 3-month highs, after which it rolled back down in a small correction. The efforts of sellers were enough only to reach the level of 5750, indicating that most traders are unwilling to close long positions. Today there will be no trading on the US stock market, but futures contracts on shares are already demonstrating a return to growth. Market participants may initiate a new upward movement tomorrow, and the S&P 500 has a good chance of a quick recovery to the level of 5970.

The main reason for fluctuations in the value of American stocks is still the president of the country. On Friday, Donald Trump announced the imposition of 50% import tariffs on goods from Europe, citing the lack of progress in negotiations with the EU. However, yesterday he postponed the effective date of the duties from June 1 to July 9, giving officials more time to reach an agreement. Tim Waterer of KCM Trade believes investors will be paying less and less attention to Trump's actions. In most cases, he intentionally intimidates his opponents before softening his stance.

Meanwhile, the UBS analysts raised their target for the S&P 500 index for the current year from 5,800 to 6,000 points. The forecast upgrade was driven by favorable corporate earnings figures for the past quarter and hopes for stronger US GDP growth in the second half of the year. UBS CEO David Lefkowitz said the US stock market may weaken somewhat due to changes in trade policy, but he sees no significant downside risk for the S&P 500.

In the coming days, the most prominent event for the market will become the quarterly report of Nvidia, one of the world's largest companies by capitalization. Its financial results will be released on Wednesday. According to LSEG experts, Nvidia's earnings are expected to grow by 45%, and its revenue should exceed 43 billion dollars. If actual values exceed forecasts, the company's shares may pull the rest of the US stock market higher.

The Stochastic indicator on the S&P 500 daily chart is close to the oversold zone. Its upward reversal will support the price movement to the level of 5970.

The following trading strategy may be suggested:

Buy the S&P 500 at the current price. Take profit – 5970. Stop loss – 5750.