The S&P 500 couldn’t make up its mind Tuesday. Same for the Nasdaq. And the Dow. Flatline by the close.
Here’s a 5-minute chart of the SPX this week. It’s been mostly sideways, with a bearish move on Tuesday, giving us lower highs and lower lows throughout the day.
The Nasdaq wasn’t much different, although it did show much more scattered movement throughout the last two days.
But under the surface, something more interesting is happening—and it’s not about tariffs anymore.
President Trump keeps tossing out trade headlines like fastballs in a batting cage. First it was a “pause” on higher tariffs. Then exemptions on electronics. Then maybe autos. Meanwhile, China’s pushing back with new tariffs of its own and telling airlines to ditch Boeing jets. That should’ve rocked the markets. But it didn’t.
Why? Because investors are tuning it out. The real mover this week? Yields.
The 10-year Treasury yield slid to 4.331% Tuesday. That drop didn’t come from nowhere—it followed talk of easing bank rules and a cooler-than-expected import price report. But what it really signaled was this: bond traders are pricing in stress. Lower yields = more fear about growth.
And guess what loves lower yields? Defensive sectors. Real estate (XLRE) popped.
Utilities (XLU) rallied.
Banks even joined in after Bank of America crushed earnings, thanks to strong net interest income.
Meanwhile, tech—despite the tariff “win”—barely moved. That’s your tell. If the market really cared about tariff exemptions, tech would’ve ripped. It didn’t.
What Traders Should Watch Next
- Ignore the chatter. Random tariff comments might still move headlines, but they’re not driving trades anymore—not unless there’s real policy behind them.
- Follow the yields. If 10-year rates keep sliding, expect more love for rate-sensitive sectors. Think REITs, utilities, and maybe even dividend-heavy consumer staples.
- Watch earnings. Bank of America set the tone with better-than-expected Q1 income. But growth expectations are still falling—depending on the source, S&P 500 earnings growth now sits around +6.7%, down from 11% a few months ago. The forward 12-month P/E ratio for the S&P 500 is 19.0. This P/E ratio is below the 5-year average (19.9) but above the 10-year average (18.3).
- Mark your calendar: Retail sales, housing data, and Fed Chair Powell’s speech this week could move the bond market—which means stocks will follow.
Bottom Line
The market’s tired of the tariff whiplash. It’s moving on. And for now, yields are the signal—everything else is noise. If you’re a trader trying to stay one step ahead, stop getting caught up in the noise and start watching the bond market. That’s where the next real move is brewing.
