by Ivan Martchev
June 3, 2025
While the S&P 500 was up 1.88% last week and +6.15% in May, we are still in a trading range, capped at 5,968 on the upside, brought on by the euphoria of the Chinese trade de-escalation in early May, and by the low of 5,767 two Fridays ago after the despair of the EU trade negotiation complications. For three weeks, we have been chopping along within that range, which is normal after the surge since early April.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Still, that relatively tight range has not been without drama. Last Wednesday night, we found out that the U.S. International Court of Trade ruled that the Trump administration tariffs were illegal under the emergency powers he claimed (note: there are plenty of other laws that allow for tariffs, so all this may turn out to be a moot point), causing a 91-point surge low-to-high in S&P futures. As soon as investors realized the Trump administration had other legal options, we saw a 124-point decline (high to low). That combined for a 215-point S&P swing in 24-hours, bigger than the total trading range for the past 3-weeks.
As a rule of thumb, think of the S&P 500 index being worth about $50-trillion at 5,800. That would put the value of a point at $8.6-billion. (I quoted one point being worth $8.4-billion last week, but I rounded down then, and the index is up this week. Furthermore, the companies within the index change and the number of shares in the index changes as companies issue more stock, so there will be some variation in the dollar-per-point value. But if you take a couple of reputable sources around the same time and take the midpoint you can say that $8.5-billion is about the right value of a point this week – I’m rounding down).
With all that rounding out of the way, 215 S&P points times $8.5-billion per point equals a 24-hour swing of $1.83-trillion – a major whiplash without the index changing much in the end. Swings of 100-points or more in the S&P 500 index were once somewhat rare – before 2025 began, along with the second Trump term, but they have dramatically increased in number since the April 2 tariff “Liberation Day” shock, sometimes with several swings within the same 24-hours, due to the nature of the trade negotiations.
So, which way is the market going to go after this tight trading range breaks – one way or the other?
If we see a successful conclusion of trade negotiations (without deteriorating economic data) that would suggest an upside breakout, while more bad news on trade, like last Friday’s statement that “The Chinese are not doing what they said they would do in early May” would suggest a breakdown. Near-term, this tight trading range tends to put a lot of pressure on the May employment report, due this Friday.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
One month’s employment report can always be noise, as there is no sign of weakness in weekly jobless claims in the past three years. Last week’s jobless claims were a little elevated, at 240,000, but they were well below the highest reading of 2024 at 259k and the highest 2023 mark, at 260k. Only when weekly jobless claims consistently show readings above 300k should we worry more about the job market.
The Trump administration has said that they have three or four trade deals ready to complete from the 18-major trading partners they are negotiating with. I am sure they have their reasons for when to time their announcements, which I suspect is directly related to how their negotiations with China and the EU are progressing, but my guess is that we should hear about the completion of these trade deals this month.
All content above represents the opinion of Ivan Martchev of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
The EU Now Seems to be Fighting for Its Long-Term Existence
Income Mail by Bryan Perry
“Trumpenomics” is Finally Kicking In
Growth Mail by Gary Alexander
Rising Debts Limit America’s Growth Potential
Global Mail by Ivan Martchev
More Trillion Dollar Swings
Sector Spotlight by Jason Bodner
Turn Up the Quiet
View Full Archive
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Ivan Martchev
INVESTMENT STRATEGIST
Ivan Martchev is an investment strategist with Navellier. Previously, Ivan served as editorial director at InvestorPlace Media. Ivan was editor of Louis Rukeyser’s Mutual Funds and associate editor of Personal Finance. Ivan is also co-author of The Silk Road to Riches (Financial Times Press). The book provided analysis of geopolitical issues and investment strategy in natural resources and emerging markets with an emphasis on Asia. The book also correctly predicted the collapse in the U.S. real estate market, the rise of precious metals, and the resulting increased investor interest in emerging markets. Ivan’s commentaries have been published by MSNBC, The Motley Fool, MarketWatch, and others. All content of “Global Mail” represents the opinion of Ivan Martchev
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