empty
06.03.2025 11:03 AM
From delays to exemptions: S&P 500 finds support

The S&P 500 found solid ground after the White House decided to exempt the auto industry from the 25% tariffs imposed on Mexico and Canada. Donald Trump and his team are now considering another exception—agricultural products, particularly potash and fertilizers. This move could provide yet another boost for US stocks.

However, the revision of the tariff list was not the only reason for the S&P 500's rebound. Support also came from international markets. Germany plans to create a €500 billion special infrastructure fund and exempt defense spending from fiscal constraints. The European Union is preparing to increase military spending by €800 billion. China has maintained its 5% GDP growth target, signaling further fiscal and monetary stimulus. Countries are bracing for trade wars, which suggests that such conflicts won't completely derail the global economy.

Recession fears grow for the US economy

Meanwhile, recession risks for the US economy have resurfaced. According to JP Morgan, the likelihood of a recession in the next 12 months has risen from 17% to 31% since late November. Goldman Sachs estimates that the scenario has increased from 14% in January to 23%.

Recession risks for US stocks

This image is no longer relevant

A recession spells trouble for US stocks. Donald Trump's statement that America must endure "some pain" before entering a new Golden Age is not reassuring for investors. The President's rapid tariff rollout has shattered market hopes that his threats were merely a bluff.

At the same time, Elon Musk is also pushing forward aggressively, accelerating efforts to reduce government bureaucracy—a move that could further slow the US economy. A fresh warning sign came with February's ADP employment report, which showed only 77,000 new private-sector jobs, the smallest increase in two years. Fearing the White House's aggressive protectionism, companies are hesitant to expand hiring.

This image is no longer relevant

Will Powell step in to support the market?

Investors are now eagerly awaiting US labor market data and Jerome Powell's comments. If Trump refuses to throw a lifeline to the S&P 500, could the Federal Reserve Chairman step in instead?

Signs of a cooling US economy have led futures markets to raise expectations for three rate cuts in 2025, up from two previously. If Powell confirms this outlook, it could trigger another wave of optimism for the S&P 500.

Technical outlook for S&P 500

On the daily chart, the S&P 500 has bounced off the expected support at 5,740, forming a potential bottom. The probability of consolidation is increasing, with the upper border likely near 5,940 or 5,980. A rejection from these levels could signal profit-taking on long positions from the dip and a possible reversal.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The Market Took a Step Back

The longest winning streak of the S&P 500 in two decades has come to an end. But who's responsible? The Federal Reserve, which plans to keep rates unchanged

Marek Petkovich 10:16 2025-05-06 UTC+2

GBP/USD Overview – May 6: Trump Goes After the Film Industry

The GBP/USD currency pair traded upward during the first half of Monday and downward during the second half. While the U.S. dollar didn't lose much this time, its brief attempt

Paolo Greco 07:04 2025-05-06 UTC+2

EUR/USD Overview – May 6: The Protest Against Donald Trump Continues

The EUR/USD currency pair began a new upward cycle on Monday. At this point, no one is likely surprised by another drop in the U.S. dollar. The market started selling

Paolo Greco 07:04 2025-05-06 UTC+2

What to Pay Attention to on May 6? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic events scheduled for Tuesday. In the Eurozone and Germany, the second estimate of April's services PMI will be published, but these are unlikely to attract

Paolo Greco 05:49 2025-05-06 UTC+2

Fed Rate Cut Probability Is Near Zero

This week marks the third Federal Reserve meeting of the year. At the first two meetings, monetary policy parameters remained unchanged, and there is virtually no chance of a rate

Chin Zhao 00:50 2025-05-06 UTC+2

The Dollar Sell-Off Shows No Signs of Slowing Down

The latest CFTC report reveals that the dollar sell-off continues unabated. Weekly changes against major currencies amounted to -$3.1 billion, bringing the total accumulated short position to -$17.1 billion

Kuvat Raharjo 00:50 2025-05-06 UTC+2

GBP/USD. The Pound and Politics

The pound reacted negatively to the results of the local elections in the UK, where the right-wing Reform UK party secured a convincing victory in many districts. However, the British

Irina Manzenko 00:50 2025-05-06 UTC+2

XAU/USD. Analysis and Forecast

Gold continues to show resilience, climbing above the key psychological level of $3300. Geopolitical tensions stemming from the prolonged Russia–Ukraine conflict and escalating hostilities in the Middle East continue

Irina Yanina 17:45 2025-05-05 UTC+2

USD/CHF: Analysis and Forecast

The USD/CHF pair remains under pressure at the start of the new week, attracting sellers for the second day in a row, weighed down by several factors. However, spot prices

Irina Yanina 17:35 2025-05-05 UTC+2

Could the Fed Deliver a Surprise Following Its Meeting? (Possible Renewed Decline in Oil Prices and GBP/USD Pair)

The turbulence of recent months, driven by Donald Trump's actions and the release of fresh U.S. economic data, has done little to help investors understand the true direction of asset

Pati Gani 09:50 2025-05-05 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.