S&P 500 futures are climbing 0.38% to
5,970 points, building on last Friday’s 1.30% gain to 5,946 points, which
helped narrow weekly losses to 0.75%. This rebound could set the stage for a
renewed push toward all-time highs. The recovery was driven by the January PCE
index, which showed inflation easing to 2.5% YoY, with core PCE slowing to 2.6%
YoY.
Falling inflation has increased expectations
for Federal Reserve (Fed) rate cuts, with bets on reductions across the next
three meetings rising. Meanwhile, 10-year Treasury yields have dropped to 4.20%
from 4.43% last week, reflecting looser borrowing conditions that support risk
assets.
From a technical perspective, the S&P 500
remains in a downside formation, with resistance at 6,010–6,030 points acting
as the key level for a reversal. A stronger breakout above 6,050–6,150 points
would activate an upside scenario, potentially pushing the benchmark toward new
extreme targets.
This week, investors will focus on U.S.
Manufacturing and Services PMIs, alongside the Atlanta Fed’s Q1 2025 GDP
forecast, which analysts expect to remain at -1.5% QoQ. If confirmed, this
could be seen either as a warning for equities or as further justification for Fed
rate cuts, potentially fueling another rally.
Another major event is the March 4 deadline
for tariffs on Mexico, Canada, and China, as previously announced by U.S.
President Donald Trump. While Trump often shifts his stance, the risk of
additional tariffs looms large, particularly given ongoing concerns over stock
market stability.
Midweek volatility could arise from ADP’s
Nonfarm Payrolls report, ahead of the official U.S. labor market report on
Friday, which is expected to have a neutral impact on markets. The European
Central Bank (ECB) will also announce its interest rate decision on Thursday,
adding another layer of uncertainty.
Despite these risks, large investors remain
bullish. Updated data shows the SPDR S&P 500 ETF Trust (SPY) recorded net
inflows of $10.75 billion, slightly lower than the previously reported $11.08
billion, but still a strong indication of institutional buying. The S&P
500’s Friday rebound suggests a potential trend shift toward renewed upside
momentum.
The technical outlook for the S&P 500
remains unchanged. The index is still in a downside formation, with primary
downside targets at 5,700–5,800 points. However, last Friday’s bounce positions
the benchmark for a test of 6,010–6,030 resistance, which could signal a
stronger upside move. The nearest support is at 5,910–5,930 points.
In commodities, Brent crude remains under
pressure, trading at $72.40 per barrel, with downside targets at $68.00–70.00
and resistance at $78.00–80.00. Oil prices are struggling as traders weigh global
economic slowdown risks.
Gold prices are hovering around $2,870 per
troy ounce, holding within the $2,850–2,880 resistance zone. The all-time high
stands at $2,954 per ounce, but the rally appears to be stalling. The next
target is $2,940–2,960, with extreme upside targets at $3,200–3,300. A drop
below $2,800 would invalidate the upside scenario.
In currency markets, the U.S. Dollar is
retreating after last week’s 0.8% gain against the euro. The EURUSD could
continue its recovery, while a break above 1.05700 could push the pair toward 1.09500–1.10500.
For a downside scenario, EURUSD must stay below 1.04700.