S&P500 (SPX) Price Analysis – March 07, 2025
Daily Price Outlook
The S&P 500 index faced selling pressure on Friday, dropping to the 5,738 mark after hitting an intra-day low of 5,711. The decline was fueled by investor concerns over US President Donald Trump's shifting trade policies and anticipation of key economic data. Although US stock index futures attempted a modest rebound, market sentiment remained fragile as traders remained cautious.
S&P 500 Under Pressure Due to Trade Policy Uncertainty
On the trade front, Wall Street saw renewed volatility following President Trump's decision to delay the 25% tariff on Canadian and Mexican goods until April 2 as part of the United States-Mexico-Canada Agreement (USMCA).
In response, Canada also postponed its planned tariffs on $125 billion worth of US products. Despite these temporary adjustments, markets remained unsettled due to the unpredictability of global trade policies.
The uncertainty surrounding Trump's tariff strategies has led to concerns over long-term economic growth, with some analysts fearing that these policies could negatively impact corporate earnings. This, combined with ongoing geopolitical tensions, has weighed on investor sentiment, limiting upside potential for the S&P 500.
US Employment Data and Federal Reserve Rate Outlook in Focus
Meanwhile, market participants are keenly awaiting the February employment report, which is expected to show an increase in nonfarm payrolls to 156,000 from January’s 143,000.
The unemployment rate is projected to hold steady at 4.0%, while wage growth is anticipated to slow to 0.3% from the previous 0.5%. Moreover, initial jobless claims fell to 221,000 last week, signaling labor market resilience despite broader economic concerns.
However, reports of rising unemployment claims among federal workers due to layoffs initiated by the Department of Government Efficiency (DOGE), led by Elon Musk, added uncertainty to the labor market outlook. Traders are now focused on Federal Reserve Chair Jerome Powell’s upcoming comments, which could provide further clarity on the central bank’s rate policy stance.
Federal Reserve Rate Cut Speculation Weighs on Market Sentiment
On the US front, concerns about trade policies and possible Federal Reserve rate cuts are affecting market sentiment. Philadelphia Fed President Patrick Harker said the economy is strong but warned about rising consumer stress and inflation risks.
Meanwhile, Atlanta Fed President Raphael Bostic pointed out economic uncertainty and urged caution in making policy decisions.
Fed Governor Christopher Waller said he’s not in favor of a rate cut at the March meeting but noted that cuts could happen later this year if inflation continues to drop.
Markets show little chance of a rate cut in March, and traders are split on whether it will happen in May. However, investors are expecting a rate cut in June, with another one likely in September.
Looking ahead, market participants will closely monitor the upcoming Nonfarm Payrolls (NFP) report, which is expected to reflect the addition of 160,000 jobs in February. Any surprises in employment data could shift expectations regarding Fed policy, influencing the S&P 500’s near-term direction.
S&P 500 – Technical Analysis
The S&P 500 (SPX) is trading at 5738.53, maintaining a cautious stance as investors assess market conditions ahead of key economic data. The index remains below its pivot point at 5762.50, signaling a potential downside bias.
Immediate support is located at 5680.36, with further declines potentially targeting 5616.83 and 5558.78 if selling pressure intensifies.
On the upside, resistance is seen at 5861.08, with a break above this level opening the door for a move toward 5938.02 and 6007.97.
However, the 50-day EMA at 5944.00 suggests that bulls may struggle to reclaim control unless broader market sentiment improves.
The technical outlook remains bearish as long as the index stays below 5762.50, reinforcing the risk of further downside.
A decisive break below 5680.36 could accelerate selling, pushing SPX toward deeper support zones.
Conversely, a move above 5762.50 may shift momentum in favor of buyers, with potential for an upside retracement.
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