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Market Summary for Friday, September 26, 2025:
Outlook for Monday, September 29, 2025:
Market Performance:
The S&P 500 saw a bounce on Friday, closing up 0.59% but slightly below the R2 resistance level of 6674.
The S&P held above the 20-period moving average (both simple and exponential), indicating a positive trend across all time frames.
Volume was below average, raising a technical concern as rising prices typically prefer higher volume for confirmation.
Growth stocks and mega caps underperformed, while value stocks and the broader market showed relative strength, suggesting a defensive market shift.
Economic Data and Sentiment:
The PCE report met expectations, with core PCE at 2.7% annually (up from 2.6%), and inflation ticked up to 2.9%, reducing expectations for immediate Fed rate cuts.
Personal income (+0.4%) and spending (+0.6%) were stronger than expected, signaling economic resilience.
Consumer sentiment weakened slightly to 55.1 (vs. expected 55.4), down from 70.1 a year ago.
The 10-year Treasury yield rose to 4.19%, and the dollar weakened, potentially supporting stocks.
Sentiment leaned slightly positive but still neutral at 53, but the market showed mixed momentum with no clear short-term conviction.
Geopolitical and Policy Factors:
Potential government shutdown looms, viewed as political posturing.
Proposed tariffs by the Trump administration (effective October 1) include 100% on imported pharmaceuticals, 25% on heavy trucks, 50% on kitchen cabinets, and 30% on upholstered furniture, aimed at promoting domestic production.
Geopolitical issues had little market influence.
Technical Indicators:
The S&P to VIX correlation and volatility risk premium are signaling caution, often preceding declines.
Parabolic SAR was negative for the second day, a bearish primary indicator.
Stochastics showed mixed signals: long-term positive but short- and intermediate-term declining.
The S&P 500 remained above key moving averages, with support at the 20-period exponential moving average.
Growth-to-value ratios weakened, particularly for small and mid-caps.
Sector and Index Performance:
Utilities led, followed by discretionary (boosted by Tesla’s +4% gain). Communication and tech lagged.
The Dow crossed 46,000 intraday but closed below a key pivot. The NASDAQ dipped below 22,300.
Financials improved but are underperforming the S&P. Small and mid-caps showed mixed results, with mid-caps filling a gap and turning positive.
Looking Ahead:
Monday’s pending home sales report is unlikely to move markets significantly.
Key data later in the week includes ISM manufacturing (Wednesday) and employment situation/ISM services (Friday), which could influence market direction.
Seasonally, September 29 shows mixed performance, with no strong directional edge.
The S&P 500 remains positive but lacks short-term conviction, with potential resistance at 6700 and support around 6583.
Conclusion:
The S&P 500 is positive and above support but shows no clear short-term direction. Mixed signals from economic data, technical indicators, and sector performance suggest caution, with upcoming economic reports and potential geopolitical developments likely to drive near-term movements.