Supreme Court Strikes Down Tariffs
The stock market was volatile on Friday as the opening losses were quickly erased following the Supreme Court’s 6-to-3 vote that the President had exceeded his authority to impose tariffs. Wall Street took it as a bullish signal as the decision came in as expected along with the administration’s response.
The Nasdaq surged to a high of 22,948 before ending at 22,546 (0.9%). Key resistance at 23,000 held. Support is at 22,500.
The S&P 500 closed at 6,836 (0.7%) after tapping a high of 6,915. Resistance at 6,925 held. Support is at 6,800.
The Dow traded up to 49,712 while going out at 49,625 (0.5%). Key resistance at 49,600 was recovered. Support is at 49,000.
Earnings and Economic News
Before the open: Domino’s (DPZ), Dominion Energy (D), Freshpet (FRPT)
After the close: Bed Bath & Beyond (BBBY), Hims & Hers (HIMS), Keysight Technologies (KEYS), Diamondback Energy (FANG), Summit Therapeutics (SMMT)
Economic News
Factory Orders – 10am
Technical Outlook and Market Thoughts
For the week, the Nasdaq was up 1.5% and the Russell gained 0.8%. The S&P 500 rose 1.1% and Dow added 0.3%. Year-to-date, the Nasdaq is down 1.5% and the S&P is higher by 0.9%. The Dow has gained 3.3% and the Russell has jumped 6.8% for 2026.
The S&P 500 returned to positive territory for the year following last week’s gains but the Nasdaq needs to reclaim 23,241 before it turns green for the year. Volatility remains slightly elevated and will likely stay that way due to ongoing geopolitical concerns.
The S&P 500 has now extended its 200-point range to 42-straight sessions after cracking the lower end on Tuesday’s intraday’s trip to 6,775. Key support at 6,800 held. The December 17th intraday low and close were at 6,720 and 6,721, respectively. If all these levels fail to hold, there is further risk to 6,600-6,500 and the 200-day moving average.
Multiple closes above resistance at 6,925 gets upside to 7,000-7,150 back on the map.
The Nasdaq held crucial support at 22,500 on Tuesday’s opening plunge to 22,256 and fresh 2026 low. Closes below 22,500 keeps 22,000-21,500 in focus and levels we mentioned would represent 8% and 10% declines from the all-time high from October 29th at 24,019.
Lowered resistance is at 23,000-23,250. Closes above the latter and the 50-day moving average would be a more bullish setup.
The Dow struggled clearing 49,600 to start the week before Wednesday’s and Friday’s close back above this level. As long as it holds, it keeps resistance at 50,000-50,500 in focus with the February 10th all-time top at 50,512.
Support is at 49,000,and the 50-day moving average. A close below 48,500 would suggest a near-term top with additional downside action to 48,000.
The Russell 2000 has been in a 100-point range since the January 9th pop above 2,600 with the current 50-day moving average moving up to 2,605. These levels are key support on another close below 2,650. Backup help is at 2,575 with the February stretch and low at 2,569.
Resistance is at 2,675-2,725 with the January 22nd record peak at 2,735. Friday’s top was at 2,682 with the close at 2,663.
The S&P 500 Volatility Index (VIX) closed back below 20 for the second time in three sessions with Friday’s low at 18.76. We mentioned coming into last week closes below 19 would be a slight relief for the bulls with Wednesday and Friday’s lows at 18.48 and 19.09, respectively. Closes below more crucial support at 17.50 would be a more bullish development for the market.
Resistance remains at 22.50-24 with Tuesday’s high hitting 22.96. There is upside risk to 27.50-30 if the latter clears and would be a bearish signal for the market.
The tariff wars certainly did not end on Friday as the President slapped a 10% global tariff on the world Friday afternoon and raised it to 15% over the weekend. This has caused a fresh pullback in bitcoin. Tuesday night is the State of the Union address and on Thursday, talks with Iran continue at the White House. Also, Nvidia (NVDA) announces earnings on Wednesday afternoon. In other words, there could be elevated volatility throughout the week.
We have been highlighting key support levels at: Nasdaq 23,250-23,000; S&P 6,850-6,800; Dow 48,500-48,000; and Russell 2,600-2,575 all month. The Nasdaq remains the only index below these levels with the S&P dipping below its latter target on Tuesday’s opening weakness.
The February monthly options have expired and the March monthly options have 25 days before expiration on Monday’s open. We like to give directional option alerts 4-7 weeks to play out so we have been targeting April calls and puts (53 days) and possibly May options (82 days).
Futures have turned nasty ahead of Monday’s opening bell. Dow futures are dropping 322 points; Nasdaq futures are tanking 248 points; S&P futures are sinking 53 points; and Russell futures are in the red by 28 points.
