S&P500 (SPX) Price Analysis – March 14, 2025
Daily Price Outlook
The global market sentiment has been flashing red as witnessed by the continued decline in the S&P 500 (SPX), which hit an intra-day low of 5,504.
However, the ongoing concerns over US trade policies and the strengthening US dollar have put pressure on market sentiment.
Investors are worried that former President Donald Trump’s tough trade stance could shake up global markets, making businesses and traders uncertain about the future.
Moreover, expectations are rising that the Federal Reserve (Fed) might increase interest rates multiple times this year.
This has given the US dollar a boost, making it stronger, but at the same time, it has put more pressure on the stock market. As a result, investors are staying cautious, watching closely how these factors will impact the economy and their investments.
Stronger US Dollar Weighs on S&P 500 Amid Cooling Inflation
On the US front, the broad-based US dollar has been gaining strong traction in the wake of stronger-than-expected jobless claims and softer Producer Price Index (PPI) data.
This combination of economic indicators has fueled optimism about the US economy, boosting demand for the greenback.
As a result, the US Dollar Index (DXY), which measures the USD against six major currencies, has gained momentum.
At the time of writing, DXY is trading around 104.00 as investors shift their attention to the upcoming Michigan Consumer Sentiment Index data.
Meanwhile, the previously released labor market data showed that Initial Jobless Claims came in at 220,000 for the week ending March 7, lower than the expected 225,000. Additionally, continuing claims dropped to 1.87 million, below the forecasted 1.90 million, indicating resilience in the US job market.
Whereas, inflationary pressures eased, with the US PPI rising 3.2% year-over-year in February, down from 3.7% in January and below the 3.3% forecast.
Core PPI, which excludes food and energy, increased 3.4% annually, slowing from 3.8% in January. On a monthly basis, the headline PPI remained unchanged, while core PPI fell by 0.1%.
Therefore, the S&P 500 faced downward pressure as a stronger US dollar and resilient job data fueled concerns about prolonged higher interest rates, while easing inflation provided limited relief to equity markets.
Trade Policy Uncertainty and Geopolitical Risks Exacerbate Market Jitters
Apart from this, President Trump’s latest trade threats intensified fears of global economic instability. Trump recently announced a potential 200% tariff on all European wines and champagne via his social media account, raising concerns over heightened trade tensions.
This move has amplified fears of retaliatory measures from the European Union, potentially disrupting global trade flows and corporate earnings.
Meanwhile, Senate Democratic Leader Chuck Schumer confirmed his support for a GOP stopgap funding bill to keep the government open, but political uncertainty over fiscal policy continues to worry investors.
US Commerce Secretary Howard Lutnick emphasized the administration’s plan to balance the budget within three years under Trump.
While this shows a focus on fiscal discipline, investors fear that aggressive spending cuts could slow economic growth.
As a result, the S&P 500 remains under pressure, with markets reacting cautiously to ongoing political and economic uncertainties.
Looking ahead, investor focus remains on the upcoming Michigan Consumer Sentiment Index data, which could provide further insights into consumer confidence and spending trends.
S&P 500 – Technical Analysis
The S&P 500 (SPX) is trading at 5521.53, holding steady after a strong run, but facing resistance as traders assess macroeconomic conditions.
The index remains above the pivot point at 5510.29, suggesting underlying strength, yet the momentum appears to be losing steam near key resistance at 5599.36. A breakout above this level could fuel further gains toward 5685.55 and 5780.12, reinforcing the longer-term uptrend.
However, downside risks persist, particularly if SPX fails to hold above 5510.29. Immediate support sits at 5406.38, and a break below this level could expose the index to a deeper pullback toward 5313.07 and 5200.68.
The 50-day EMA at 5764.78 remains a critical long-term marker, currently indicating a stretched market that may be due for consolidation or correction.
Investor sentiment remains cautious ahead of key economic events, including the upcoming Federal Reserve minutes and macroeconomic data releases.
Traders are closely monitoring inflation signals and the Fed’s policy stance, which could dictate near-term direction. A hawkish tone from the central bank may trigger profit-taking, while dovish comments could reignite bullish momentum.
For now, the index remains in a consolidation phase, with a decisive move above 5599.36 needed to confirm a continuation of the rally. Conversely, a break below 5406.38 may signal a shift in sentiment, prompting a correction.
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