S&P500 (SPX) Price Analysis – Feb 28, 2025
Daily Price Outlook
Global market sentiment turned bearish as the S&P 500 tumbled more than 1% on Friday, closing at 5,860 after hitting an intra-day low of 5,858.
The sharp decline was fueled by concerns over corporate earnings, weak economic data, and escalating geopolitical uncertainties.
One of the biggest contributors to the market downturn was NVIDIA (NASDAQ: NVDA), which fell 8.5% to close at $120.15.
Despite reporting strong fourth-quarter earnings that exceeded Wall Street expectations, investors reacted negatively to concerns over narrowing profit margins and rising production costs related to the company’s new Blackwell systems and chips.
Strong US Dollar and Economic Data Weigh on Markets
On the US front, the US Dollar Index (DXY) surged above 107.00 following the release of fourth-quarter GDP data, which showed an annualized growth rate of 2.3%. Although this matched initial estimates and market expectations, it signaled a slowdown from the 3.1% growth seen in Q3.
Meanwhile, Federal Reserve Bank of Atlanta President Raphael Bostic reiterated that the Fed should maintain its current interest rate policy to keep inflation under control. This stance dampened hopes for an imminent rate cut, adding pressure to equity markets.
Meanwhile, the latest labor market data showed a significant increase in initial jobless claims for the week ending February 22, attributed to corporate layoffs and severe winter weather.
Furthermore, recent services PMI and Michigan consumer sentiment data suggested the economy might be slowing, reinforcing expectations that the Fed could cut interest rates in 2025, though no immediate changes are expected.
Therefore, the S&P 500 faced downward pressure as a strong US Dollar, hawkish Fed stance, and slowing economic indicators fueled investor concerns, reducing hopes for near-term rate cuts and weighing on equities.
Global Trade Tensions Rise Amid New Tariffs and Economic Measures
Apart from this, US President Donald Trump announced a series of new tariffs, including a 25% tariff on Mexican and Canadian goods and an additional 10% duty on Chinese imports. This move heightened concerns about global trade tensions.
Meanwhile, the White House issued an executive order aimed at cutting government costs, further influencing market sentiment.
In addition, the People’s Bank of China (PBOC) injected CNY300 billion into the economy, maintaining interest rates at 2% to support economic stability. However, these measures did little to ease investor concerns over slowing global growth.
Moving ahead, the market participants now turn their attention to the upcoming Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge.
S&P 500 – Technical Analysis
S&P 500 is trading at 5861.56, down 0.01%, reflecting cautious market sentiment as it hovers below the Pivot Point at 5887.91. The index faces immediate resistance at 5962.87, followed by stronger barriers at 6043.48 and 6144.23.
These resistance levels coincide with the 50-day Exponential Moving Average (EMA) at 6047.19, signaling continued selling pressure unless the index breaks above this level.
On the downside, immediate support is observed at 5773.29, with further cushions at 5715.01 and 5663.83. A break below 5773.29 could accelerate the bearish trend, pushing the S&P 500 towards lower support zones.
Conversely, a sustained move above 5887.91 could challenge the 5962.87 resistance level, potentially shifting momentum toward the bulls.
The technical setup indicates a bearish bias as long as the S&P 500 trades below the 50 EMA and the Pivot Point. The 4-hour chart shows a descending trendline, reinforcing selling interest. If the price fails to reclaim the 5887.91 level, it is likely to face continued downward pressure.
For now, the recommended strategy is to Sell Below 5887, with a Take Profit at 5774 and a Stop Loss at 5962. Traders should watch for price action around 5887.91, as a break above this level could invalidate the bearish outlook and trigger a short-term recovery.
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