S&P 500 Daily Update for Friday September 26, 2025

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Market Summary for Thursday, September 25, 2025:

Outlook for Friday, September 26, 2025:

Thursday Market Recap:

Market Performance: The S&P 500 saw a decline, with the S&P 500 dropping 0.5% on above-average volume, closing slightly above 6,600 after testing support at 6,575. It gapped lower below S1 (6,616), fell below S2 (6,593), but rebounded to close above S2.

Trends and Indicators: Short-term positive conviction has waned, with the parabolic SAR turning negative and the ADX weakening below its moving average. The S&P 500 remains above the 20-period moving averages, a critical support level. Stochastics and other indicators show increasing negativity, with the S&P-to-VIX correlation signaling some volatility pickup.

Economic Data: Strong economic reports fueling doubts about future rate cuts. GDP was revised up to 3.8% (from 3.3%), jobless claims dropped to 218,000 (expected 238,000), and durable goods rose 2.9% (expected -0.5%). The 10-year yield rose to 4.17%, contrary to expectations following recent Fed rate cuts, mirroring patterns from September and December 2024.

Sector and Stock Performance: Mega-cap and growth stocks underperformed, with Oracle down 5.55% despite its role in a TikTok deal. Energy was the only sector to gain, driven by rising oil prices. The dollar has entered a short-term uptrend, potentially pressuring stocks.

Sentiment and Technicals: Sentiment shifted from positive (57) to neutral (52). Smart money indicators (e.g., Chaiken Money Flow, McClellan Oscillators) turned negative, and the bullish percent index weakened but remains above 50. The S&P 500 is showing internal weakness with declining advance-decline lines and contracting new highs.

Friday Outlook:

Seasonal Trends: Historically, September 26 has been positive for the Dow and S&P since 1980, though the week after options expiration tends to be weaker. September’s second half is typically soft.

Key Events: The Core PCE inflation report and consumer sentiment data, both critical for Fed policy, are due. Geopolitical events are currently having minimal market impact.

Technical Outlook: The S&P 500 remains positive in the short, intermediate, and long term, supported by the 20-period exponential moving average. However, negative conviction is following through with price declines, and a break below this support could target the 50-period moving averages. The 6,590 level is a key pivot for options-related gamma dynamics.

Conclusion:

Despite short-term weakness and negative divergences, the S&P 500 is holding above key supports level. The Core PCE report will be pivotal for gauging inflation and potential Fed actions, which could influence whether the market bounces or continues to soften.

Key Takeaways:

Strong economic data is reducing certainty for expectations for rate cuts, pushing yields and the dollar higher, which may pressure stocks. The S&P 500 is holding above support at the 20-period moving averages and potential further downside risks if breached.

PDF of Slides:
https://drive.google.com/file/d/1rNo02gv4p3DGcDpH_cmlwaoCh0pbjVjU/view?usp=sharing

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!