The potential for earlier and deeper Fed rate cuts, lower bond yields, enduring strength in big US stocks, and investors’ willingness to overlook short-term earnings weakness are broadly supporting the American market and S&P 500. Large-cap companies appear to have some resilience buffer from accumulated reserves against tariff hike risks.
Last week, Wall Street closed at a record high, boosted by broad signs of labor market resilience that eased investor fears about an economic slowdown. However, a sector-by-sector look paints a less optimistic picture.
Manufacturing lost 7,000 jobs, and wholesale trade shed 6,600 jobs, likely due to new import tariffs. Professional and business services also saw a drop of 7,000 jobs. The share of industries reporting job growth fell to 49.6% from May’s 51.8%. The average workweek shortened to 34.2 hours (from 34.3 in May). Clearly, the private sector is losing steam in the late second quarter, signaling potential trouble for the third quarter economic performance.
Technically, the S&P 500 looks overbought and will likely pull back soon toward its previous breakout level of 6,050. Any unexpected announcements from Trump about tariff timelines or details could trigger this decline.
The overall recommendation is to sell SPX.
Profits should be taken at the level of 6,050. A Stop loss could be set at the level of 6,400.
The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.
This content is for informational purposes only and is not intended to be investing advice.
