LIVE MARKETS-S&P 500 futures surge with traders braced for sharp swings

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S&P 500 FUTURES SURGE WITH TRADERS BRACED FOR SHARP SWINGS

U.S. stock index futures turned sharply higher on Monday after President Donald Trump said he will order the military to postpone any strikes against Iranian power plants and energy infrastructure. Trump said the postponement followed productive conversations with Iran. However, headlines from Iranian media, contradicting Trump's comments, have somewhat tempered market moves.

After falling more than 1% in overnight trade, E-mini S&P 500 futures EScv1 surged more than 4% off their low following Trump's comments. They are now up around 2% on the day.

Meanwhile, traders are focusing on the percentage of S&P 500 Index .SPX stocks that are trading above their 50- and 200-day moving averages (DMA), and the fact that the index itself ended below its 200-DMA on Friday for a second straight session.

On Friday, the percentage of S&P 500 stocks above their 50-DMA fell to 19.68%.

That's the lowest level since 14.31% on April 21, 2025. This measure put in a bottom at 4.97% on April 8, 2025, the day of the S&P 500's low close during its early 2025 tariff panic. Major lows of the past four years or so have ranged from 2.2% to 17.5%.

The percentage of S&P 500 stocks trading above their 200-DMA ended Friday at 44.7%, which is the lowest level since 43.3% on May 9, 2025. This measure bottomed at 17.1% on April 8, 2025. Major lows over the past four years or so have ranged from 11.1% to 40.4%.

Thus, traders are eyeing both measures for signs of potentially washed-out levels.

In any event, traders are also bracing for the potential for some wild price action, given that the Cboe Volatility Index .VIX, now around 24, remains elevated, and the S&P 500 index ended below its 200-DMA on Friday.

Of note, looking back more than 30 years, or to early 1992, 43 of the 50 biggest S&P 500 down days, or 86% of them, occurred when the S&P 500's prior day's close was below its 200-DMA.

That said, 47 of the 50 biggest up days over this period, or 94% of them, occurred when the S&P 500's prior day's close was also below its closely followed long-term moving average.

(Terence Gabriel)

EARLIER ON LIVE MARKETS:

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EUROPEAN SCREENS FLASH RED, CORRECTION IN SIGHT CLICK HERE

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