The S&P 500 Index will resume trading on Tuesday on a more positive footing on the back of the US-EU trade deal. The Index closed each of the last four sessions in the red as risk aversion ruled the market following President Donald Trump’s threat of 50% tariffs on imports from the Eurozone starting June. However, that hurdle has been removed at least until July 9, giving room for negotiations to establish a friendlier business ecosystem for nearly $1 trillion worth of goods traded between the two blocks.
Eyes On Nvidia and The Fed
Investors will have their eyes on Nvidia (NASDAQ: NVDA) earnings call for cues on the trajectory of the tech industry, which constitutes about 30% of the S&P 500 Index weight. The AI chips will release its earnings for the quarter ending April 2025 on Wednesday, and investors will be expecting another forecast-beating revenue.
Nvidia is also expected to start selling a new class of AI chips in China, starting as early as June. The chips will be cheaper and of a lower capacity than the H20 chips which are subjected to export restrictions. The company will likely divulge further details on Wednesday, and the underlying sentiment will add propulsion to the Index. However, another tech giant, Apple (NASDAQ: AAPL) stock faces pressure following Trump’s 25% tariff threat against iPhone imports.
Meanwhile, two FOMC officials, Neel Kashkari and John Williams will speak in the course of the day on Tuesday, and their speeches could give hints on the Federal Reserve’s monetary policy ahead of Wednesday’s FOMC meeting minutes and Friday’s release of Personal Consumption Expenditure (PCE) figures.
Fed Chairman Jerome Powell has been under pressure from US President Donald Trump to lower interest rates, and the calming of trade tariff worries and a relatively stable US economy could provide a pathway to do that. Such a scenario favours the S&P 500 Index to stay up.
S&P 500 Index Prediction
S&P 500 Index pivots at 5,715 points and the bulls will be in control if action stays above that level. The Index will likely meet the first resistance at 5,846. An extended control by the buyers will break above that level, and could push the action higher to test 5,970 points.
Conversely, the momentum will shift to the downside if the action goes below 5,715. That will likely see the first support come at 5,620. The upside narrative will be invalid below that level. Furthermore, such momentum could extend losses and test the second support at 5,500 points.
The post S&P 500 Index: Trade Tariff Reprieve, Nvidia Earnings Call Provide Propulsion appeared first in UK on InvestingCube.