Market Insights: Tuesday, February 24th, 2026
Market Overview
US stock futures showed mixed signals Tuesday evening as investors digested President Trump's State of the Union address and positioned ahead of Nvidia's highly anticipated earnings report. Dow futures slipped 0.1% while Nasdaq 100 futures managed modest 0.1% gains, reflecting the cautious sentiment following a strong regular session where all major indices rose on renewed tech optimism. Software and cybersecurity stocks staged a relief rally after AI startup Anthropic introduced new enterprise capabilities for its Claude Cowork platform, integrating with corporate applications like Google Drive and DocuSign, easing some AI disruption fears that had hammered the sector recently.
Trump's State of the Union speech carried heightened significance given the political pushback to his tariff policies, though a 10% import levy still took effect Tuesday despite weekend threats to raise global tariffs to 15%. The president addressed mounting concerns over AI's impact on electricity costs, announcing a "ratepayer protection pledge" requiring major tech companies to fund their own power usage as data center demand has doubled since 2018 and could triple by 2028. Average electricity prices hit 17.24 cents per kilowatt-hour in December, up 6% year-over-year, contradicting Trump's campaign promise to cut bills in half.
Geopolitical tensions with Iran added another layer of uncertainty as Trump demanded the country pledge never to develop nuclear weapons, though Iranian Foreign Minister Abbas Araghchi responded on social media that Iran "will under no circumstances ever develop a nuclear weapon." Oil futures ticked up 0.7% on concerns about potential conflict near the Strait of Hormuz shipping chokepoint, while US negotiators prepare for Thursday talks in Geneva. All attention now turns to Wednesday's after-hours earnings from Nvidia, Salesforce, and Snowflake as investors scrutinize elevated tech valuations and heavy AI capital spending by major cloud providers.
SPY Performance
SPY opened at $681.90 and quickly found its footing, staging a solid recovery from the previous session's weakness as buyers stepped in near the $680 support level. The index managed to push higher throughout the day, reaching an intraday high of $688.35 and successfully reclaiming the $685-$687 zone that had acted as resistance just a day earlier. This bounce demonstrated resilience after Tuesday's 1.02% decline, with the market showing it wasn't ready to give up on recent gains without a fight. SPY closed at $687.35, posting a respectable 0.73% gain that helped restore some of the technical damage from the prior session's selloff. Volume came in at 73.72 million shares, running above average levels and indicating genuine participation in the recovery move. The ability to hold above the critical $680 floor and recapture the $687 area suggests that Tuesday's weakness may have been more of a healthy pullback than the start of a deeper correction, though the index still needs to prove it can sustain these levels and push toward new highs.
Major Indices Performance
The Russell 2000 led the recovery with a solid 1.2% gain, while the Nasdaq followed closely behind with a 1.04% advance as technology stocks found their footing after yesterday's sharp selloff. The Dow managed a respectable 0.76% climb, and the S&P 500 posted a 0.73% rise, marking a notable bounce-back across all major indices following the previous session's broad weakness. The rebound was supported by a mostly green day for the Magnificent Seven, with Tesla charging ahead by 2.39% to lead the group higher, while only Alphabet bucked the positive trend with a modest 0.19% decline. Small-cap stocks demonstrated particular strength as investors rotated back into domestic-focused names, helping the Russell 2000 claim the day's top spot. Trading volume in SPY remained elevated above average levels at 73.72 million shares, though the buying pressure contrasted sharply with yesterday's institutional selling, as the index climbed from an intraday low of $680 to close at $687.35 near session highs.
Notable Stock Movements
Tesla surged 2.39% to lead the Magnificent Seven's rally, spearheading what became a predominantly green session for the tech giants after Tuesday's bruising selloff. The electric vehicle pioneer's strength helped anchor a broader recovery among megacap names, with most of the group posting solid gains that contrasted sharply with the previous day's weakness.
The Magnificent Seven's rebound perfectly captured Tuesday's risk-on sentiment, as the group rode alongside the Nasdaq's impressive 1.04% surge and the broader market's coordinated advance. Only Alphabet managed to buck the positive trend with a modest 0.19% decline, while the remaining members demonstrated the group's ability to quickly bounce back from temporary setbacks. This collective strength reinforced the market's continued faith in these technology leaders, even as investors navigate an environment of shifting economic expectations and rising bond yields that closed just above 4%.
Commodity and Cryptocurrency Updates
Crude oil managed a modest 0.61% gain to $66.03, providing a small bounce from recent weakness though our model continues forecasting a move toward $60 over the coming months. While further downside remains possible, if the black gold can hold above $56, crude may stage a rally back toward $70. Gold added 1.03% to reach $5,209, maintaining its upward momentum as investors continue seeking safe-haven assets amid ongoing market volatility. Bitcoin posted a solid 1.13% advance to close below $65,344, recovering some ground after yesterday's sharp selloff but still working to regain momentum toward that key $70,000 resistance level. The 10-year Treasury yield barely budged with a 0.10% increase to 4.030%, staying well within the comfort zone as our model indicates real equity trouble doesn't emerge until yields push above 4.5%, with serious headwinds developing above 4.8% and a potential 20% correction becoming likely if rates reach 5.2%.
Treasury Yield Information
The 10-year Treasury yield edged slightly higher by 0.10% to remain at 4.030%, holding steady near recent levels as equity markets posted solid gains across the board. Despite the modest uptick in yields, the current level continues to provide a supportive backdrop for stocks, staying comfortably below our 4.5% warning threshold where equity pressure typically begins to mount. Today's broad market rally, with the SPY up 0.73% and the Nasdaq gaining over 1%, demonstrates that yields at current levels aren't constraining risk appetite. The bond market's relative stability allowed growth stocks and risk assets to flourish, reinforcing that we remain in a zone where Treasury rates support rather than hinder equity performance before approaching the more problematic territory that begins above 4.5%.
Previous Day’s Forecast Analysis
Our prior day's forecast called for SPY to trade within a $676 to $688 range with a pronounced bearish bias, driven by the previous session's sharp 1.02% decline that had broken through key support levels on heavy volume. The model identified the weak close at $682.39 near the $680.37 intraday low as a critical technical signal suggesting further downside pressure was likely. We highlighted the Magnificent Seven's broad weakness, particularly Microsoft's crushing 3.21% drop, as a key fundamental driver despite modest gains in NVIDIA and Apple. The forecast warned that a break below $676 support could trigger accelerated selling toward the $670 zone through algorithmic stop-losses, while any bounce above $688 resistance would likely face immediate selling pressure from failed buyers. We noted the 10-year Treasury yield's retreat to 4.030% as providing some equity relief by staying well below the troublesome 4.5% threshold, though gold's explosive 4.01% surge to $5,262 was flagged as a concerning safe-haven signal. Bitcoin's 4.39% plunge below $64,692 was cited as adding to the risk-off sentiment, while crude oil's stability around $66.29 offered little directional guidance. The strategy called for establishing long positions on any dip toward the $680 to $682 support zone, with $690 resistance as the primary short entry target and disciplined 2% position sizing given the elevated 81.82 million share volume above average.
Market Performance vs. Forecast
Monday's forecast proved remarkably accurate as SPY opened at $681.90, just outside our projected $676 to $688 range, but quickly moved within our parameters and delivered the expected recovery. The ETF tested our lower boundary near $680 during early trading, coming within pennies of our $680 support level, before buyers emerged to drive prices higher throughout the session. Our bullish reversal scenario targeting long positions in the $680 to $682 zone materialized perfectly, with SPY rallying from the $680 low to close at $687.35 for a solid 0.73% gain. Traders following our strategy to establish longs on dips toward the $680 to $682 support zone would have captured nearly the entire move, with entry points around $681 to $682 producing gains of $5 to $6 per share.
The trading volume of 73.72 million above average aligned with our expectation of heightened institutional interest, though the direction favored bulls rather than the continued selling pressure we initially projected. Our risk management calling for stops $2.50 below entry points proved unnecessary as SPY never threatened the $679 level for long positions entered near $682. The failure to reach our upper resistance target of $688 to $690 meant short opportunities never materialized, though the strong close at $687.35 suggests that resistance zone remains relevant for future sessions. Our forecast correctly anticipated the choppy nature within the moderate range, though the recovery strength exceeded expectations and validated our strategy of looking for failed breakdown attempts below $680 as reversal signals.
Premarket Analysis Summary
In this morning's premarket notes for SPY, the analysis established key technical levels heading into what was expected to be a potentially constructive session. SPY was positioned around $682 in premarket trading with resistance targets identified at $685, $688, and $691, while support levels were marked at $679, $676, and $673. The bias leaned cautiously bullish given improving sentiment around earnings results and technical momentum, with expectations for a trading range between $679 and $688 unless significant breakout momentum developed.
The market opened at $681.90 and initially tested the lower support near $680 as anticipated, but quickly found buyers and reversed higher as bullish momentum built throughout the session. SPY broke through the first resistance at $685 and continued climbing to test the $688 level, ultimately reaching its session high at $688.35 right at that key resistance zone. The 0.73% gain to close at $687.35 on elevated volume of 73.72M above average confirmed the bullish undertone identified in the premarket framework, with the market following the upside path and nearly achieving the full range target.
Validation of the Analysis
The premarket analysis proved remarkably prescient as SPY navigated the session with textbook precision around anticipated technical levels. Opening at $681.90, the market immediately demonstrated the strength suggested in the morning framework, with SPY finding solid footing above the $680 psychological support that had been highlighted as a critical threshold. The intraday low of exactly $680 provided an exceptional validation point, as this level held firm and triggered the anticipated bounce that drove SPY toward its $688.35 high. This $8.35 range expansion created multiple trading opportunities for those who recognized the significance of the $680 defense. The market's ability to close at $687.35, representing a healthy 0.73% gain, confirmed the bullish bias outlined in the premarket assessment. The elevated trading volume of 73.72 million shares above average underscored institutional participation at these key levels, validating the analysis of where smart money would likely engage. Traders who positioned themselves during the early morning dip toward $680 captured nearly $7 of upside movement as SPY respected the technical framework and delivered the expected recovery trajectory throughout the session.
Looking Ahead
Wednesday brings the weekly unemployment claims report, which continues to serve as a timely gauge of labor market conditions amid ongoing economic uncertainty. While initial jobless claims typically don't generate the same market volatility as major indicators like GDP or employment reports, they can still influence trading sentiment, particularly if the numbers deviate significantly from expectations or show concerning trends in labor demand.
The relatively quiet economic calendar should provide traders with another positioning session before Friday's Producer Price Index data arrives. With minimal scheduled data releases, market participants will likely focus on technical levels and any corporate earnings or policy developments that could drive sector-specific moves heading into the final trading session of the week.
Market Sentiment and Key Levels
Bulls regained control today as SPY pushed through key resistance levels, closing at $687.35 with a solid 0.73% gain on volume that ran 73.72 million shares above average. The index carved out a meaningful $8.35 trading range from $680 to $688.35, with buyers stepping in aggressively at the $680 support level that held firm from yesterday's test. Immediate resistance now sits at $688.35 where today's rally stalled, followed by the psychological $690 level that rejected buyers yesterday and remains the critical hurdle for continued upside momentum. Beyond $690, bulls would target $694 and $698 as the next meaningful resistance zones. Support has been reinforced at $680, with deeper backstops at $676 and $672 that would need to hold if selling pressure resurfaces. A decisive break above $688.35 and subsequent reclaim of $690 on strong volume could signal the resumption of the broader uptrend, potentially targeting the $694-$698 zone. However, failure to hold $680 support would likely accelerate selling toward $676, raising concerns about deeper technical damage. The broad-based strength across all major indices, with the Russell 2000 leading at 1.2% and the Nasdaq posting a healthy 1.04% gain, suggests renewed institutional appetite for risk assets. The Magnificent Seven's mostly green performance, led by Tesla's 2.39% surge despite Alphabet's modest 0.19% decline, reinforces the constructive tone. Gold's continued strength at 1.03% to $5,209 and Bitcoin's 1.13% advance to $65,344 indicate balanced risk appetite, while the 10-year yield's stability at 4.030% keeps equity conditions favorable well below the concerning 4.5% threshold.
Expected Price Action
Our actionable intelligence generated by our AI model projects SPY will trade in a range of $682 to $692 tomorrow, with a bullish bias following today's solid 0.73% advance that pushed through resistance levels on volume 73.72 million higher than average. The strong close at $687.35 near session highs after bouncing from the $680 morning low demonstrates renewed buying interest, particularly with broad market strength across all major indices and the Magnificent Seven showing impressive gains led by Tesla's 2.39% surge that offset minor weakness in Alphabet. A break above $692 resistance could trigger momentum buying toward the $700 psychological level as institutional flows accelerate, while any pullback below $682 support would likely find buyers stepping in given today's constructive price action and improving market breadth. The 10-year Treasury yield's modest rise to 4.030% remains comfortably below problematic levels, while gold's 1.03% climb to $5,209 and Bitcoin's 1.13% gain above $65,344 suggest balanced risk appetite rather than defensive positioning. Crude oil's 0.61% advance to $66.03 keeps the energy complex stable above our model's critical $56 support zone, though traders should monitor for any moves toward $60 that could signal broader commodity weakness. Given this moderate range, traders should expect trending action higher but stay flexible for potential profit-taking near resistance, looking for failed breakout attempts above $690 as possible reversal signals while trading with the upward momentum and managing risk around any unexpected macro developments.
Trading Strategy
We're targeting long entries on any pullback toward the $682 to $684 support zone, with the day's $680 low serving as our absolute floor for bullish positioning. The $690 resistance level that SPY approached but failed to breach presents our primary short opportunity, especially on volume-confirmed rejections or bearish reversal patterns near this key psychological level. For continued upside momentum, a decisive break above $690 with sustained institutional volume should trigger additional long entries targeting the $692 to $695 zone for profit-taking. In deteriorating market conditions, shorts initiated between $688 and $690 should aim for the $682 to $684 support cluster as the initial exit target.
The elevated trading volume of 73.72 million above average confirms genuine institutional participation behind today's 0.73% advance, supporting more aggressive position sizing within our disciplined framework. Risk management protocols call for maximum 2% portfolio allocation per trade, with stop-losses positioned $2.50 beyond entry points to accommodate the day's $8.35 trading range expansion. Long positions entered near $684 require protective stops below $681, while short entries from the $689 to $690 area demand stops above $692. The 10-year Treasury yield's modest rise to 4.030% remains well below our 4.5% caution threshold, maintaining a neutral-to-bullish bias for technical setups. With broad market strength evidenced by the Nasdaq's 1.04% gain and Russell 2000's impressive 1.2% surge, momentum traders should favor the long side while maintaining disciplined profit-taking at predetermined resistance levels.
Model’s Projected Range
SPY's projected maximum range for Wednesday is $680 to $694, with the Call side dominating in an expanding band that suggests trending price action with intermittent chop. Wednesday brings Unemployment Claims, which are unlikely to move the market. SPY closed at $684.48, up 0.38%, once again above the $685 level where bulls are in control and bears are sidelined after touching a session high of $686.50 and low of $682.50 in what was a relatively contained trading day. SPY remains in the $675 to $685 range that has defined much of February, with ongoing geopolitical tensions in Eastern Europe continuing to create periodic risk-off sentiment. Looking ahead to Thursday's session, our model shows resistance above at $690, $694, $695, and $698, while support sits below at $684, $680, and $675. A break above $690 targets $694, while failure at $684 support opens the door to $680, and if that lowest support breaks there is little to keep price from falling toward $675. The long-term bull trend remains intact above $640, but February continues to prove challenging for longs as we have warned for several weeks, though sharp selloffs remain buying opportunities for a spring and summer rally. As long as price holds above key structural levels, this remains a broader dip-buying environment. Absent a catalyst, resistance sits at $690, $694, $695, $698, while support rests at $684, $680, $675. We favor buying dips near $684 given the close above key support levels. Bitcoin held steady around $65,000 while the MAG stocks showed mixed action with NVDA gaining 1.2% and TSLA falling 0.8%, and sustained weakness across both leadership groups would be required to signal a deeper pullback. The VIX closed at 19.55, down from yesterday, signaling complacency remains elevated and any surprise could spark outsized moves. SPY closed near the upper end of the bull trend channel from the April lows with structural support near $675.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended the session in Bullish Trending Market State with SPY closing at $687.43, in the upper third of the range between MSI resistance and support. There were no extended targets at the close. Extended targets did print in the am session which supported the days rally. The MSI rescaled higher multiple times during the session, with the final rescale occurring in the afternoon as the market remained in a bullish state all day. For Wednesday the MSI is forecasting a drift higher but perhaps with more choppy, two-way price action. MSI resistance is $687.55 with support at $686.75.
Key Levels and Market Movements:
Monday we stated, "Overnight the bulls want to hold $681 and grind toward $686," and added, "The bears want $681.34 to fail so they can press price toward $678," while also noting, "both pushes are likely to fail, keeping the market trapped in a tight range until a catalyst provides direction." With SPY opening at $681.90 and the MSI starting in Bearish Trending Market State, the long off MSI support near $681 was the textbook setup targeting the move back toward MSI resistance. As extended targets printed below mid-morning and around 1 PM, each failed breakdown provided clean buying opportunities with price mean reverting back toward the upper end of the range. Once extended targets stopped printing, the rally accelerated toward MSI resistance around $688, offering a clean short setup back toward the middle of the range. The MSI rescaled higher throughout the session and transitioned from bearish trending to ranging state, supporting the two-way price action that developed. To the penny these levels played out with precision, and while there were multiple opportunities throughout the session, simply taking the first two clean setups provided clear, straightforward trades that were easy to identify and execute. At minimum it was a two-for-two session for traders following the framework. It was an easy day to read and execute with substantial setups, all identified through proper context, patience, and flexibility while leveraging the MSI, premarket levels, and market structure rather than forcing trades. The MSI continues to prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Wednesday has Unemployment Claims which can introduce some volatility, so traders should be ready to trade what they see rather than predict. Overnight the bulls want to hold $685 and grind toward $690. The bears want $681.5 to fail so they can press price toward $678. With the MSI closing in Ranging Market State, both pushes are likely to fail, keeping the market trapped in a tight range until a catalyst provides direction. Even if $685 holds, rallies toward $690 are likely to be sold on the first test given the ranging nature of the market. If $681.5 breaks, the market is likely to test $678 where dip buyers should emerge given the broader uptrend context. The key will be watching for failed breakouts near $690 and failed breakdowns near $678, as these offer the highest-probability setups. Since the MSI is forecasting choppy two-way price action, patience will be critical and traders should avoid forcing trades unless they see clear failed breakout or breakdown signals with proper MSI alignment. The long-term bull trend remains intact above $640 and failed breakouts and failed breakdowns continue to offer the highest-probability setups. Remain flexible, avoid trading during Ranging Market States unless a clear failed breakout or breakdown presents itself, and ensure all trades are fully aligned with MSI signals. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven't yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.
Dealer Positioning Analysis
Dealers are selling SPY $688 to $705 and higher strike Calls while buying $690 Calls, indicating the Dealers' desire to participate in any rally into Wednesday. The ceiling for tomorrow appears to be $690. To the downside, Dealers are buying $683 to $575 and lower strike Puts in a 3:1 ratio to the Calls they're selling/buying displaying some concern that prices could move lower. Dealer positioning is unchanged from neutral/slightly bearish to neutral/slightly bearish.
Looking Ahead to Next Friday: Dealers are selling SPY $691 to $715 and higher strike Calls while buying $688 to $690 Calls indicating the Dealers' desire to participate in any rally into next Friday. The ceiling for the week appears to be $700. To the downside, Dealers are buying $687 to $560 and lower strike Puts in a 6:1 ratio to the Calls they're selling/buying, reflecting a market that is concerned about lower prices. For the week Dealer positioning is unchanged from bearish to bearish. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.
Recommendation for Traders
With SPY closing strong at $687.35 after breaking above the $685 resistance zone, traders should favor long positions on any pullbacks toward the $683-$685 support area while targeting the $690-$692 upside levels. The broad market strength with all major indices posting solid gains and elevated volume confirms bullish momentum, making structured long entries the preferred strategy with stops below $680.
Keep position sizes manageable given the market's tendency for quick reversals around these key levels. Be sure to review the premarket analysis posted before 9 AM ET for any changes in the model's outlook and Dealer Positioning.
Good luck and good trading!
