On Friday, stocks showed a slight increase following President Donald Trump's announcements regarding new trade agreements and potential tariff reductions on China.
Trump's Trade Deal Announcements
President Trump indicated that new trade agreements are forthcoming and expressed support for tariff reductions on China ahead of upcoming meetings. He stated, “Many Trade Deals in the hopper, all good (GREAT!) ones!” This was right after he announced a draft deal with the United Kingdom, marking the first international trade agreement for the U.S. since the so-called reciprocal tariff update in early April.
S&P 500's Status and Resistance
The S&P 500 ended Thursday at around 5,664, which appears decent on paper. However, it falls considerably below the intraday high of 5,720. Throughout the day, the index showed brief optimism but then dropped sharply into the close. Wolfe Research strategist Rob Ginsberg noted, 'Not the ideal close, as ~5700 resistance is proving to be quite stubborn since the S&P first took it out 2 months ago.'
Market Signals and Projections
At the same time, a significant market signal has indicated bearish conditions. Bloomberg Intelligence's Equity Market Regime Model has dropped into its worst phase—known as the 'red zone'—which often predicts weak performance for the S&P 500. This is the first instance since February 2022 when concerns regarding Federal Reserve rate hikes impacted U.S. stocks.
In conclusion, despite President Trump's encouraging trade deal announcements, stocks continue to face pressure, and the S&P 500 is struggling at the 5,700 level.
