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 InstaTrade
© 2007-2025

Recommended Stories

What to Pay Attention to on May 28? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Wednesday. Among the more or less noteworthy reports, only Germany's unemployment rate and the change in the number of unemployed can be highlighted

Paolo Greco 06:53 2025-05-28 UTC+2

What Could Trump's Minimal Tariffs Lead To?

Donald Trump has given countries he claims are "robbing the U.S." a three-month deadline to reach trade agreements. As of now, two months into this deadline, only one deal

Chin Zhao 00:45 2025-05-28 UTC+2

NZD/USD. May RBNZ Meeting: Preview

The Reserve Bank of New Zealand (RBNZ) will announce the results of its next policy meeting on May 28. According to most analysts, the central bank is expected

Irina Manzenko 00:44 2025-05-28 UTC+2

The Dollar Is Getting Used to Defeat

Everything has its limits—including Donald Trump's negotiation strategy. The longer his policy of threats followed by postponements continues, the less seriously markets take his actions. His warnings are no longer

Marek Petkovich 20:39 2025-05-27 UTC+2

Inflation in the Eurozone Gives the ECB Room to Act

The euro declined after the release of inflation data from France and the GfK report from Germany. Exactly three years ago, eurozone data showed inflation had risen to 8.1%. Immediately

Jakub Novak 20:26 2025-05-27 UTC+2

XAU/USD. Analysis and Forecast

Gold is extending its decline for the second day in a row. The pressure on gold is driven by a combination of factors: optimism stemming from U.S. President Donald Trump's

Irina Yanina 19:38 2025-05-27 UTC+2

USD/JPY. Analysis and Forecast

The Japanese yen continues to weaken during intraday trading. One of the key factors putting pressure on the yen is Japan's decision to consider reducing the issuance of ultra-long-term bonds

Irina Yanina 19:35 2025-05-27 UTC+2

Trump drives market rhythm

Much ado about nothing. President Trump's announcement of 50% tariffs on imports from the European Union starting June 1—only to delay them until July 9—barely rattled financial markets. Investors

Marek Petkovich 12:11 2025-05-27 UTC+2

Bank of Japan Plans To Raise Rates Further

Despite the Bank of Japan's plans to continue raising interest rates, the yen is currently heading in a very different direction. During his speech today, Bank of Japan Governor Kazuo

Jakub Novak 11:32 2025-05-27 UTC+2

Christine Lagarde Believes in the Euro

The European currency showed little reaction yesterday to a speech by European Central Bank President Christine Lagarde, who stated that the unpredictable policies of President Donald Trump present an excellent

Jakub Novak 11:19 2025-05-27 UTC+2
Can't speak right now?
Ask your question in the chat.
 

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 InstaTrade anyway.

We are sorry for any inconvenience caused by this message.