Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on August 19, 2019 in New York City.
Drew Angerer | Getty Images
For all the volatile moves seen in the stock market recently, there has been one constant: The S&P 500 cannot stay above 2,930.
The magic number has garnered the attention of traders with the S&P 500 closing above it just four times in 24 trading sessions since Aug. 1 with numerous intraday moves above and below the level. Wednesday’s session marked the first time since Aug. 8 that the broad index breached 2,930 on a closing basis.
Wall Street’s inability to sustain a move above 2,930 comes as China and the U.S.’ inability to reach a deal that will end the trade war rattles investor sentiment. Experts think a sustained move above that level will require some sort of resolution to the U.S.-China trade conflict.
“We need a significant catalyst to break above this 2,930 level,” said Jeff Kilburg, CEO at KKM Financial. “I think it’s going to be along the lines of a true trade resolution. We just don’t have that yet. Short of that, we’re going to have a tough breaking out to the upside.”
Trade tensions between China and the U.S. escalated last month. China unveiled new tariffs on a slew of U.S. imports which took effect over the weekend. The U.S. retaliated by hiking tariffs on billions of dollars worth of Chinese goods.
Tensions between the world’s largest economies eased Wednesday night, however, after U.S. and Chinese officials agreed to meet in Washington next month. The news sent global stocks rallying. However, stock investors could be setting themselves up for disappointment.
“Ever since early August, investors are being whipped around by a series of contradictory tweets, headlines, and ‘reports,'” strategists at Bespoke Investment Group wrote in a note Wednesday. “One day the trade war with China is at the point of no return. The next day the two sides are talking.”
This back and forth has led to a slew of volatile moves in stocks. Over the past 24 trading sessions through Wednesday’s close, the S&P 500 has posted 12 moves of at least 1%.
“With all the ups and downs, the S&P 500 finds itself trading at a level right around 2,930,” according to Bespoke.