S&P 500 Futures Slip 0.51%

U.S. stock futures dropped early Friday as the postelection rally showed signs of faltering and the Federal Reserve indicated a cautious stance on further interest rate cuts. Dow Jones Industrial Average futures fell 156 points, or 0.36%, while S&P 500 and Nasdaq 100 futures declined 0.51% and 0.76%, respectively.

Tech stocks saw mixed fortunes, with chip equipment manufacturer Applied Materials sliding over 8% after issuing weak revenue guidance for the current quarter. Conversely, Domino’s Pizza surged more than 7% following news that Berkshire Hathaway had taken a stake in the company, signaling investor confidence in the fast-food giant.

This follows a negative session on Thursday, where the Dow lost over 200 points, and both the S&P 500 and Nasdaq Composite fell by approximately 0.6%. Major indexes are poised to close the week lower, eroding last week’s postelection gains spurred by Donald Trump’s victory. Notably, the Nasdaq Composite has declined 0.9% this week, while the S&P 500 and Dow have fallen 0.8% and 0.5%, respectively.

Despite the broader market pullback, the Dow achieved a milestone earlier in the week, closing above 44,000 for the first time. However, concerns over the Federal Reserve’s restrained approach to monetary easing and mixed corporate earnings have tempered investor optimism. This underscores the fragile nature of the recent rally amid evolving economic and political uncertainties.

S&P 500 Technical Analysis

The 15-minute chart of the S&P 500 Index (SPX) shows a bearish trend over recent sessions, with a consistent decline from earlier highs around 6,017.31 to the current level near 5,949.16. The pattern indicates selling pressure as the index struggles to hold any rebound attempts, suggesting weak investor sentiment in the short term.

The Relative Strength Index (RSI) is at 36.93, which is below the neutral 50 mark and approaching oversold territory (30 or below). This level typically signals that the selling momentum could be nearing exhaustion, but it does not confirm a reversal without further evidence. The declining RSI trend suggests that the bears still have control, though a reversal could be on the horizon if the index dips further and the RSI enters oversold conditions.

Key support is seen near 5,930, a level tested several times during the chart period. A break below this level could trigger further downside pressure. On the other hand, if the S&P 500 rebounds, it could face resistance around 5,980. For now, the technicals suggest caution, as the index may continue its downward trend unless it finds strong support or positive momentum to change course.

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