S&P 500 Up 0 55% on Tuesday Amid Cautious Optimism; CPI Report Looming for Wednesday, June 11, 2025

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Market Summary for Tuesday, June 10, 2025, and Outlook for Wednesday, June 11, 2025
Tuesday Market Recap:

Market Performance: The S&P 500 rose 0.55%, closing near the intraday high after late-day buying countered some selling pressure. The market opened higher, reached the R1 pivot point at 6,020, pulled back, hit R2 at 6,034, and oscillated between these levels. Despite the gain, volume remained below average.

Technical Indicators:

The market remains above the 20, 50, and 200-period moving averages, signaling positive short-, intermediate-, and long-term trends, though not trending (ADX below 20).

Momentum indicators such as the Stochastic RSI, Williams %R, and CCIs show positive momentum, but the S&P bullish percent index has dipped below its moving average, indicating some internal weakness.

The VIX is in the high 16s, reflecting lower volatility which is positive sentiment for stocks.

Sector Highlights:

Semiconductors showing promise, supporting mega-cap leadership.

Discretionary (led by Tesla’s 5.67% gain and Amazon) and communication (Google, Meta) sectors outperformed, while energy had a good day.

Growth underperformed value slightly.

Economic and Geopolitical Context:

The 10-year Treasury yield was stable at 4.47%, below the 4.5% threshold, supporting equities.

The NFIB Small Business Optimism Index rose to 98.8, signaling improving sentiment.

U.S.-China trade talks continued with cautious optimism, with Commerce Secretary Lutnik noting progress.

Geopolitical tensions, including Iran’s aggressive nuclear stance, caused brief intraday dips but didn’t derail the market.

Market Sentiment:

Sentiment ticked up to 64 (from 62), still below the extreme positive threshold of 75.

Institutional investors (smart money) are more positive than retail investors, who remain pessimistic, potentially a bullish signal.

Key Events for Wednesday:

Economic Data:

The Consumer Price Index (CPI) report is the focal point, expected to provide critical insight into inflation trends.

The Producer Price Index (PPI) and Treasury Budget data will also be released, with PPI’s market impact varying.

Weekly MBA Mortgage Applications Index is due.

Geopolitical Developments:

Ongoing U.S.-China trade talks could influence market sentiment if progress is reported.

Protests in California and other cities, along with Iran-related tensions, may introduce volatility.

Market Outlook:

Bias: Remains positive in the short, intermediate, and long term, but the market is not trending, leaving it vulnerable to shifts.

Pivot Points: Key levels to watch for Wednesday’s session will guide intraday movements.

Seasonality: Historical data suggests negative to neutral performance for June 11, particularly in post-election years, with the S&P up only 7 out of 18 times since 1950.

Expectations: The market has likely been subdued ahead of the CPI release, with potential for increased volatility afterward. Higher highs and higher lows persist, but conviction is lacking, and “buy the dip” behavior continues to drive short-term support.

Conclusion:

Tuesday’s market showed cautious gains with some internal weaknesses, supported by lower yields and positive trade talk developments. Wednesday’s CPI report and trade talk updates will be critical drivers, with the market poised for potential volatility amid a positive but non-trending outlook.

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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!