S&P500 (SPX) Price Analysis – March 21, 2025
Daily Price Outlook
The S&P 500 (SPX) extended its losses and dropped below 5,662, hitting an intra-day low of 5,632. The broad market index remains under pressure as investors react to heightened geopolitical tensions, US tariff threats, and expectations of Federal Reserve rate cuts.
Geopolitical Tensions Weigh on Market Sentiment and S&P 500
Market sentiment was further dampened by escalating geopolitical tensions. Russia and Ukraine intensified aerial attacks, with Ukraine targeting Russia’s Engels airbase, resulting in fire and explosions.
Moreover, Russia launched 171 drones over Ukrainian territory, escalating the conflict. Meanwhile, Russian and US officials are set to hold talks in Saudi Arabia on Monday regarding the ongoing war.
On the other side, the tensions in the Middle East have also worsened, as Israel resumed heavy strikes across Gaza, ending a ceasefire with Hamas that had been in place since late January.
In response, Hamas launched three rockets at Israel on Thursday, further unsettling global markets. Therefore, the increasing geopolitical instability drove investors toward safe-haven assets like gold and the US dollar, while risk-sensitive equities, including the S&P 500, faced renewed selling pressure.
Trade War Fears and Tariff Uncertainty Weigh on Equities
Apart from this, investors remain concerned over US President Donald Trump's reciprocal tariff threats, set to take effect on April 2.
The uncertainty surrounding these tariffs, on top of a 25% duty on steel and aluminum implemented in February, has raised fears of a potential trade war.
Therefore, the lack of clarity on the specifics of these tariffs is keeping market participants cautious, leading to continued selling pressure on equities.
Fed Rate Cut Expectations and Stronger Dollar Weigh on S&P 500
On the US Fed front, the Federal Reserve has indicated plans for two 25-basis-point rate cuts by the end of the year, citing concerns over economic growth amid the uncertainty of Trump's trade policies.
Fed Chair Jerome Powell acknowledged that tariffs could dampen economic activity, leading to increased speculation that the central bank will lower interest rates in June, July, and October.
Meanwhile, the US dollar continues to strengthen for the third consecutive day, creating headwinds for equities and further pressuring the S&P 500.
Looking ahead, investors will closely watch updates on US tariff policies, geopolitical developments, and upcoming Federal Reserve meetings to gauge the future direction of the market.
S&P 500 – Technical Analysis
The S&P 500 is trading at 5662.88, holding steady with a slight uptick of 0.01% as traders navigate a market influenced by economic data and Federal Reserve signals.
The 50-day EMA at 5662.39 is currently aligning with price action, acting as a key dynamic level that could dictate near-term direction.
The pivot point at 5686.10 serves as a critical marker for today’s session. If the index fails to reclaim this level, a bearish move could accelerate toward immediate support at 5599.00, followed by 5506.10 and 5407.38.
The lack of upside momentum suggests potential weakness, with profit-taking emerging after recent highs.
On the upside, resistance is noted at 5780.12, with further barriers at 5859.14 and 5938.11. A breakout above these levels would suggest renewed bullish sentiment, possibly leading to fresh all-time highs.
A sell-off below 5686 could confirm a bearish breakout, increasing the likelihood of a correction toward 5561.
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