Since April, U.S. stocks have risen significantly, but recent poor economic data, tariff concerns, and uncertainties surrounding the Federal Reserve’s interest rates may disrupt this upward trend; Analysts predict that the S&P 500 Index could fall to 6,100 points, with both real-world factors and seasonal influences likely to be unfavorable; Technically, the S&P 500 Index has broken below its 20-day moving average, and the share prices of utility companies have hit a 52-week high, suggesting an increase in defensive sentiment in the market.

Cailian, August 4 (Editor Ma Lan) – Since Trump announced the tariff policy in April, U.S. stocks have experienced significant volatility, but they have since rebounded sharply from their lows. As of last week, the S&P 500 Index and the Nasdaq have risen by about 29% and 40%, respectively, from their April lows.

However, disappointing economic data, tariff concerns, and uncertainties about the Federal Reserve’s interest rates may disrupt this upward trend. In addition, given that August is historically a seasonally weak month for U.S. stocks, analysts are not bullish on the recent performance of U.S. equities.

BTIG’s Chief Technical Analyst Jonathan Krinsky believes that the S&P 500 Index could fall to 6,100 points, a 5% decline from current levels. He also noted that in August last year, the S&P 500 Index fell by about 8% from its high.

He stated that history does not repeat itself, but it often rhymes. If the S&P 500 Index quickly falls to 6,100 points, that level might be a good buying opportunity.

Short-term weakness may be expected

According to the Stock Trader’s Almanac, the ROI for U.S. stocks in August is typically and suspiciously low. Since 1950, it ranks 11th out of 12 months, with an average decline of 1.2% in post-presidential election years.

In Krinsky’s view, the headwinds this year are particularly strong. Beyond seasonal factors, the U.S. employment data is weak, inflation may rise again, and the new tariffs set to be imposed on August 7 are all detrimental to the U.S. stock market.

From a technical perspective, the S&P 500 Index fell below its 20-day moving average on Friday. Traders view the 20-day moving average as an important short-term indicator; if the index is above the moving average, it suggests that the uptrend continues, but once it breaks below, things may turn for the worse.

Ryan Detrick, an analyst at investment research firm Carson, noted that in the first year after an election, U.S. stocks typically reach a high point around this time and then bottom out in late October. Although this does not necessarily mean that this year will follow the same pattern, seasonal disruptions are quite common.

Krinsky also highlighted risks from another angle, noting that utility stocks recently reached their 52-week highs. These stocks are generally considered defensive assets, which further supports his view of a potential correction.