Stocks finished slightly higher on the day, with the S&P 500 up about 40 basis points, nearly half of which came in the final 30 minutes of trading—there was an approximate $3 billion buy imbalance into the close. Given that tomorrow is the last day of May, some of this activity may be related to month-end rebalancing.

The bigger story today was the ongoing chaos surrounding tariffs. The tariff situation feels never-ending at this point, and it’s unclear how this will ultimately unfold. However, there seems to be a determination to find a path forward. Notably, Section 232 tariffs appear unaffected, meaning pharmaceutical and semiconductor tariffs remain a significant target.

A clear sign that something was wrong with the S&P 500 futures rising following the news was the Taiwan dollar (USDTWD), which continued to strengthen. The Korean won also gained on the day. These two economies are closely linked to semiconductors, and whenever there’s uncertainty around tariffs and trade tensions, movements in these currencies typically reflect sentiment, especially regarding technology.

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Initially, we saw the yen weaken against the dollar, but that move reversed around 2 AM. By the end of the day, USDJPY had strengthened by about 45 basis points.

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As for the S&P 500, it initially rose higher in the futures market following the news. However, by the opening, most of those gains had faded, leaving the index trading essentially at yesterday’s highs—and notably, still below last week’s peak.

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This creates the potential for a “2B top” pattern in the futures—a reversal formation that occurs when prices attempt to make a new high but ultimately fail to close above the previous high. In this case, the futures attempted to take out the highs on May 19.

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I’ll take a bigger-than-usual risk here and stick my neck out—even if it means potentially being embarrassingly wrong. More importantly, though, the pattern forming in the S&P 500 strongly resembles the diamond reversal pattern we saw back in January, indicating a potential reversal might be near. Additionally, one could argue that a head-and-shoulders pattern has also developed.

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It is the same setup in the Dow.

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The pattern is also present in the S&P 500 Equal Weight ETF, RSP.

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I’m not sure what the catalyst for a move lower might be—perhaps a hot PCE report tomorrow or an irate “Truth” from the President. Oddly enough, the last time he posted on social media was nearly a full day ago, so after being labelled a “TACO” yesterday and dealing with the court orders, he probably isn’t happy. I know I wouldn’t be.

Finally, Nvidia NVDA managed to open above $140 but was unable to maintain those levels. Given today’s rejection at the $140 mark, I’ll be interested to see how things unfold tomorrow. As I noted last night, we probably wouldn’t fully understand the market’s reaction until today’s session concluded—and right now, the path of least resistance appears to be downward.

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