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- The sentiment around the S&P Index is upbeat, and investors are seeing a silver lining in President Trump's trade tariffs.
The S&P 500 Index gained 0.75% on Wednesday, and that momentum is likely to stay in play as investors react to upcoming trade tariffs and Apple’s $100 billion US investment announcement. The Index has been bullish for some time amid a resurgence of investor confidence in the stability of US economic policies and calming of trade tariff fear. This set up could potentially push the index to new all-time highs in the short-term.
Apple dodged a bullet ahead of the incoming August 9 deadline for US tariffs when its CEO Tim Cook visited the White House and announced a $100 billion investment in the US. The tech giant will set up a manufacturing facility in Kentucky, with the that will see the company manufacture glass covers for iPhones and Apple watches in the US. That move has seen the company avoid 25% tariffs that US President Donald Trump had threatened to impose, as a way of bringing more manufacturing jobs home.
Meanwhile, as far as trade tariffs go, investors appear convinced that the impact will likely be less than previously feared. In addition, Trump’s incoming tariffs against semiconductors could be as high as 100% and investors have interpreted this as protectionist for US manufacturers. Broadcom, Intel, Nvidia, AMD, Micron and Texas Instruments are all part of the S&P 500 Index (INDEXSP: .INX) and the incoming tariffs will cushion them against external competitors like TSMC. Also, the earning season is still in play, and if impressive results keep streaming in, they could add strength to the prevailing tailwinds on the S&P 500 Index.
S&P 500 Index Prediction
The S&P 500 Index pivots at 6,347 points and the momentum calls for further upside above that level. The Index will likely meet initial resistance at 6,400 points, but a stronger momentum could clear that barrier and potentially test 6,427.
Alternatively, going below 6,347 will shift the momentum to the downside. If that happens, the S&P Index will likely go lower and find the first support at 6,310. Breaking below that level will invalidate the upside narrative, and the resulting momentum could take the action lower and test 6,280 points.
