Jun. 26 at 12:49 AM
The S&P 500 closed Thursday just above its 50-day moving average, a key technical support level that analysts say could determine the market's near-term direction. A decisive break below that level could lead to additional selling, while history suggests longer-term investors have often been rewarded after similar pullbacks.
According to Dow Jones Market Data, the Nasdaq Composite has already fallen below its 50-day moving average, and the Nasdaq-100 is approaching the same threshold. Over the past five instances when the S&P 500 closed below its 50-day average, the index delivered an average 10.7% gain over the following six months, despite increased short-term volatility.
Market strategists said recent weakness reflects a rotation away from expensive technology stocks, with the Magnificent Seven losing more than
$3 trillion in market value during June. Kevin Smith of Crescat Capital said investors should consider adding downside protection.
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