S&P Tests Major Resistance as Tariff Shock Lifts Sentiment

E-mini S&P (March) / E-mini NQ (March)

S&P, last week’s close: Settled at 6923.25, up 46.25 on Friday and 72.75 on the week

NQ, last week’s close: Settled at 25,067.50, up 208.75 on Friday and 264.25 on the week

E-mini S&P and E-mini NQ futures were under pressure due to stagflationary headwinds from the slate of economic data on Friday morning; inflation was higher, and growth was slower. However, the tape seemingly got a much-needed boost after the Supreme Court struck down President Trump’s tariffs. I say this because the Federal Reserve has pushed back on rate cuts for nearly a year, out of fear of tariff-induced inflation that has yet to materialize. The odds of a rate cut in June actually shrank from just better than a coin flip to worse, but we see this as more of a reaction to necessary Treasury forecasts needed to plug a hole left by tariff revenue.

Market participants race to forecast increased uncertainties around the future of tariffs, the impact of Friday’s massive options expiration, which could help encourage a directional move, and overhanging geopolitical questions, as we lead into the most important earnings report of the quarter from NVDA on Thursday.

Although both indices finished sharply higher, E-mini S&P futures continue to struggle at major three-star resistance at 6927.25-6931. Last night was arguably part of the fourth test that began in the second half of the session on Friday and slipped by nearly 1 back to support at 6871. The tape saw reinvigorated interest through the European open and pared more than half of the overnight losses, but the swing underscores a struggle to extend gains. Was this early morning resurgence sticky? We do believe so if price action can battle to hold above our Pivot and point of balance through the first hour, with those levels coming in at…