Wall Street’s three main indexes are trading modestly lower at the beginning of May, and the U.S. stock market remains under pressure. Vanguard S&P 500 ETF has weakened around 0.6% this Tuesday; still, the price of this ETF continues to trade in a bull market, and according to technical analysis, there is no sign of the trend reversal.
Fundamental analysis: May could bring more pain for stock market investors
Vanguard tracks the S&P 500 and gives you exposure to 500 of the most significant public companies in the United States. This ETF price weakened this Tuesday, but it continues to trade in a bull market.
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Investors are selling tech-related companies amid concerns about the rising interest rate and uncertainty over an upcoming jobs report. Amazon, Apple, Alphabet, Microsoft, and Facebook posted better than expected first-quarter results, but recent comments from Treasury Secretary Janet Yellen created a sell-off.
The U.S. economy continues to recover from the pandemic, and Janet Yellen said that the FED might need to hike the interest rate. The U.S. economy grew by 6.4% in the first quarter, while the labor market also shows signs of recovery.
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,†Janet Yellen said.
The stimulus program, rapid vaccinations, and the Federal Reserve’s accommodative policy have boosted U.S. stock markets at record highs, but investors have started to behave nervously. May could bring more pain for stock market investors, and if this happens, the Vanguard 500 ETF will probably be at lower price levels.
The U.S. will publish the Nonfarm Payrolls report on Friday, and this will be one of the main events of this week. The report is expected to show a rise in job additions in April, but after Friday’s Nonfarm Payrolls report, investors will have a much clearer picture.
Technical analysis: Vanguard 500 ETF continues to trade in a bull market
The U.S. stock market could weaken even more in the upcoming weeks, but for now, this ETF remains in the “bull†market, and there is no indication of the trend reversal.
The important support levels are $360 and $340, $390, and $400, represent the resistance levels. The trendline on the chart above also represents a firm support level, if the price breaks this trendline, it would be a firm “sell†signal, and we have a free way to $340. As long the price is above this trend line, this ETF continues to trade in a bull market.
Summary
Vanguard S&P 500 ETF has weakened around 0.6% this Tuesday, but it continues to trade in a bull market. The U.S. stock market remains under pressure by recent comments from Treasury Secretary Janet Yellen. Investors took some gains of stocks’ growth areas and continue to seek shelter in more defensive parts of the market.
