S&P500 (SPX) Price Analysis – March 28, 2025
Daily Price Outlook
The S&P 500 index has been facing challenges lately, dropping to an intra-day low of 5,670. This decline is due to concerns about various macroeconomic and geopolitical issues.
In the meantime, the uncertainty around US policy, the impact of increasing tariffs, and global trade disruptions are weighing on the market. Moreover, investors are worried about potential credit rating downgrades as rising government deficits and economic instability could lead to more risks for market stability.
US Policy Uncertainty Weighs on Market Sentiment
It should be noted that the announcement of new tariffs by US President Donald Trump on imported cars and light trucks has significantly impacted investor sentiment.
These new tariffs, along with Trump's planned reciprocal tariff announcements next week, have fueled fears of a trade war, further intensifying global economic uncertainty. This has resulted in a more cautious approach from investors, contributing to a decline in the S&P 500.
On the other hand, Moody's has warned that the combination of tax cuts and higher tariffs could widen the US government’s deficits, making a potential downgrade of the US debt rating more likely. This has raised alarms among investors, adding to the market's negative sentiment.
In the meantime, the S&P Global also warned that policy uncertainty in the US could hinder global economic growth, especially in emerging markets, while Fitch Ratings noted that smaller economies like Brazil, India, and Vietnam would be particularly vulnerable to these trade disruptions.
Therefore, the warnings from Moody’s, S&P Global, and Fitch Ratings about rising deficits, trade disruptions, and policy uncertainty heighten market concerns, leading to increased volatility and further pressure on the S&P 500 index.
Rising Treasury Yields and Economic Concerns
Another major factor affecting the S&P 500's performance is the rise in Treasury yields. As of the latest data, the 2-year US Treasury yield stood at 3.99%, and the 10-year yield was at 4.35%.
These higher yields suggest growing investor concerns about inflation and future interest rate hikes by the Federal Reserve.
Hence, the stronger US Dollar, supported by the higher yields, has also added downward pressure on the S&P 500.
US GDP Growth Surpasses Expectations Amid Escalating Global Trade Disruptions, Keeping S&P 500 Under Pressure
Despite the challenging outlook, the latest data on US Gross Domestic Product (GDP) for Q4 2024 revealed a growth rate of 2.4%, surpassing expectations of 2.3%.
This positive GDP growth has led investors to look closely at upcoming economic indicators, including the US Personal Consumption Expenditures (PCE) Price Index, due for release soon.
Meanwhile, global trade disruptions are escalating, with China’s push to strengthen its aluminum industry by 2027 and recent tariff threats from the US on copper imports adding further complexity to the market landscape.
Therefore, the stronger-than-expected GDP growth of 2.4% provides a positive outlook, but escalating global trade disruptions, including China's aluminum push and US tariff threats, add uncertainty, keeping the S&P 500 under pressure.
S&P 500 – Technical Analysis
The S&P 500 is trading at 5693.32, up 0.05%, continuing its slow grind higher as equity markets digest macroeconomic cues. The index remains above its key pivot point at 5673.60, supported by the 50-period Exponential Moving Average (EMA) at 5660.75.
This alignment signals continued bullish momentum in the short term, with traders maintaining confidence in the broader trend.
Immediate resistance is seen at 5784.91. A sustained break above this level could open the door to further upside toward 5865.56 and potentially 5968.80.
The overall price structure remains bullish, with the index trading within an upward channel on the 4-hour timeframe. While the relative strength index (RSI) hints at slightly overbought conditions, there is no immediate sign of reversal.
On the downside, support is found at 5606.24. A breach below this level may prompt a corrective pullback toward 5506.10, followed by deeper support near 5407.38.
However, unless price slips below the pivot and loses the EMA support, pullbacks are likely to be viewed as buying opportunities.
For now, the path of least resistance remains to the upside. A buy-on-dip strategy above 5670 remains favorable, with a target near 5842 and a stop-loss at 5587 for risk-managed positioning.
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