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Stock Market Rally takes a Breather

Stock Market Rally takes a Breather

April 05, 2022
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Last week the stock market was relatively quiet following two big up weeks. The market consolidated its gains and took a breather after a volatile start to the new year. Most major indexes were down for the first quarter of 2022, but this doesn’t mean the stock market will have a bad year. A negative quarter can occur at any time and it’s a part of normal stock market volatility.

In the last market update I discussed how 4600 is a key resistance level for the S&P 500. The S&P did break 4600 last week and it’s been slightly above or below this level for the past several days. It was positive that the market didn’t drop quickly upon reaching this level and that it’s forming a base around the 4600 level. The stock market may continue to rise, albeit with ups and downs along the way, to its previous high of 4818.

Looking ahead to the first month of this quarter and potential market drivers, the Fed meeting minutes come out on Wednesday and earnings reports begin next week. The Federal Open Market Committee minute gives investors a more detailed look at Fed policy and this information has the possibility to move the market. Quarterly corporate earnings always move the markets, and these reports come out over a several week time period.

It seems that the stock market has absorbed the shock of the Ukraine war and I believe only a major escalation in the war would push the market lower. On the flip side, there is plenty of potential upside if there is a peace deal.

Photograph by Dylan Hunter on Unsplash

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