The S&P 500 futures are up 0.27% to 5,681
points this week, but this gain feels weak after Tuesday’s 2.0% surge. The
index pulled back following U.S. President Donald Trump’s announcement of
unexpected tariffs, dipping to 5,671 points and closing the gap—removing a
technical barrier for future rallies. Investor sentiment remains fragile.
Although the Wall Street Journal attempted to
reassure markets by suggesting that the new tariffs might be narrowed, Trump
later confirmed a 25% tariff on imported cars and parts from April 2. The
S&P 500 dropped 1.3% to 5,702 points, wiping out almost all its weekly
gains. Investors now anticipate retaliatory measures from other nations, which
could escalate trade tensions further. Trump has reiterated that reciprocal
tariffs on all trading partners will take effect from April 2, increasing
uncertainty. The SPDR S&P 500 ETF Trust (SPY) saw net outflows of $22.03
billion last week, with an additional $590.4 million exiting this week,
indicating investor caution.
U.S. business activity for March presents a
mixed picture. The services sector offers some optimism, potentially boosting
Q1 2025 GDP, but the consumer confidence index plummeted to 92.9 from 100.1,
the lowest since December 2020. Trump’s aggressive trade policies are adding
strain to the economy, leaving the Federal Reserve (Fed) as the only potential
stabilising force. If Trump escalates trade conflicts next week, the Fed may
need to step in to ease pressures. Inflation data also disappointed. The Fed’s
preferred core PCE index for February came in at 2.8% year-over-year, above the
expected 2.7%, while headline PCE matched expectations at 2.5%. The S&P 500
fell further on these developments, and investors now anxiously await any
further tariff-related news over the weekend.
Technically, the S&P 500 remains on track
for primary targets at 5,800–5,900 points, with extreme targets at 6,300–6,400.
However, given that primary targets were nearly reached, a deeper correction is
possible. Key support lies at 5,670–5,690, while resistance is at 5,780–5,800.
Holding above support could allow for another push higher.
Brent crude remains under pressure at $73.40
per barrel, weighed down by recession fears. Support is at $68.00–$70.00, while
resistance stands at $78.00–$80.00. A break below support could push prices
down to $58.00–$60.00.
Gold prices continue their rally, setting a
new all-time high at $3,086 per troy ounce. The next resistance is at
$3,050–3,080, with extreme upside targets of $3,150–$3,250. The bullish trend
remains intact, with immediate support at $2,950–$2,980.
In the currency market, the U.S. Dollar has
entered a correction phase. The EURUSD has reached its upside target of
1.09500–1.10500 and now faces significant overbought pressure. A retracement
towards 1.06000 has begun, as the pair struggles to find fresh upside drivers.