Equities are gaining momentum today, continuing the positive sentiment from yesterday. Fed chair Powell reassured that there is no urgency to change the central bank’s policy and stated that tariff-related inflation is expected to be temporary.
S&P 500 futures indicate a 0.5% increase, with buyers aiming to sustain yesterday’s momentum. The first challenge will occur at the market’s opening, with the main index approaching an important near-term level.
Key Technical Levels
The 100-hour moving average constrained recovery yesterday and remains a focal point for assessing the market’s direction. Additionally, the 200-day moving average is nearby, serving as another indicator for dip buying tendencies this week.
This morning, stock markets are carrying forward the confidence seen on the previous day. Powell’s remarks reinforced the idea that the current approach from monetary policymakers remains in place, easing concerns about abrupt changes. Inflation pressures stemming from tariffs, according to him, should not persist. This reassurance has helped strengthen investor sentiment, with futures pointing to further gains.
At the open, markets will be tested again. A 0.5% advance in S&P 500 futures suggests that momentum is intact, but buyers will need to prove they can maintain control. Picking up from where things left off, attention will be placed on whether early strength fades or extends further.
Technical indicators provide a sense of where price movements may pause or reverse. The 100-hour moving average acted as a barrier for upward movement previously and remains in focus. Traders will be watching closely to see if it holds resistance again or gives way, potentially opening the door for further buying. Meanwhile, the 200-day moving average sits nearby and has often been viewed as a signal for longer-term sentiment. Dip buyers have used this area in the past, meaning its role in market activity this week will not be overlooked.
Market Sentiment And Positioning
Bond markets remain a critical gauge. Interest rates have been stirring volatility across different asset classes, with Treasury yields continuing to provide short-term direction. Any shifts in expectations for future policy decisions could quickly spill over into equities, particularly those reliant on lower borrowing costs.
Meanwhile, options activity suggests traders are positioning cautiously. Open interest at key strike prices indicates hedging remains an active consideration, reflecting an awareness that conditions can change quickly. Price action near these levels will offer more insight into whether confidence strengthens or hesitancy prevails.
All of this underscores the importance of reacting to both technical signals and broader economic updates. While Powell’s comments have provided reassurance for now, markets will continue assessing incoming data for any reasons to reassess. The next few sessions could determine whether optimism persists or if resistance proves too strong for buyers.
