S&P 500 futures are rising by 0.33% to
5,648 points, but the upside remains unsteady after the benchmark pulled back
from Wednesday’s high of 5,716 points. Despite a market reversal following the
Federal Reserve’s meeting, investor sentiment remains cautious, with some
resuming sell-offs.
Fed Chair Jerome Powell moved to support
markets after U.S. President Donald Trump and Treasury Secretary Scott Bessent
blamed the central bank for the recent market correction and economic slowdown.
The Fed had limited options—remaining hawkish could have turned the recent 10%
market correction into a full-blown 20% crash. As a result, policymakers will
halt monetary tightening in April by slowing the balance sheet drawdown to $5.0
billion per month from the current $25.0 billion, effectively softening
quantitative tightening. Powell also downplayed concerns about a tariff-driven
inflation spike, emphasizing its temporary nature. The Fed remains committed to
two quarter-point interest rate cuts by the end of 2025.
Following these developments, the S&P 500
reversed course, invalidating the previous bearish formation that had downside
targets of 5,350–5,450 points. The index is now positioned for an upside move
towards 5,800–5,900 points by mid-April, with a potential extension to
6,300–6,400 points by late May. However, this rally must continue without
significant pullbacks below 5,500 points in the coming weeks. Market sentiment
would benefit if Trump refrains from escalating tariff threats, while Powell
continues reinforcing the transitory nature of inflation and the Fed’s easing
stance.
Large investors remain hesitant. The SPDR
S&P 500 ETF Trust (SPY) saw net outflows of $9.86 billion this week, with a
major sell-off on Wednesday, effectively wiping out the previous week’s $7.49
billion inflows. This could be a profit-taking move or an early sign of deeper
concerns. Market participants are questioning Powell’s claim that tariff-driven
inflation will be short-lived, recalling his similar stance in 2020–2021, which
later proved incorrect, forcing aggressive rate hikes. For now, the S&P 500
retains enough momentum for a gradual recovery.
Technically, the outlook has shifted bullish,
with primary targets at 5,800–5,900 points and extreme targets at 6,300–6,400
points. Key support lies at 5,570–5,590, while resistance stands at
5,670–5,690. A breakout above resistance could occur next week.
Brent crude remains under pressure at $71.67
per barrel, struggling against recession fears. Support is at $68.00–$70.00,
while resistance is at $78.00–$80.00. A failure to hold support could lead to a
deeper drop to $58.00–$60.00.
Gold prices have accelerated, setting a new
all-time high at $3,057 per troy ounce. The next resistance stands at
$3,050–3,080, with an extreme upside target of $3,150–3,250. The bullish trend
remains intact, with immediate support at $2,950–2,980.
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
started, as the pair struggles to find new upside drivers once the correction
begins.