Market Jitters: S&P 500 Slumps as Key Economic Data Looms

Markets remain on edge ahead of major economic releases, including US inflation data, Canada’s rate decision, and the UK’s GDP report. The S&P 500 continues its downward trend after peaking at 6,149.50 in February, with technical signals reinforcing bearish momentum. Goldman Sachs has also lowered its year-end target, citing economic uncertainty and slower growth. Investors will be watching upcoming data for potential shifts in market direction.

Wednesday 14:30 (GMT+2) – USA: CPI m/m (USD)
Wednesday 15:45 (GMT+2) – Canada: Overnight Rate (CAD)
Thursday 14:30 (GMT+2) – USA: PPI m/m (USD)
Thursday 14:30 (GMT+2) – USA: Unemployment Claims (USD)
Friday 09:00 am (GMT+2) – UK: GDP m/m (GBP)

Since reaching a high of 6,149.50 on February 19, the S&P 500 Index has established a clear downward trajectory, characterized by a series of lower highs and lower lows—a textbook indication of sustained bearish momentum. The initial trend reversal was signaled by the formation of a non-failure swing pattern, where the peak at 6,149.50 surpassed the prior high before price action subsequently declined below the trough at 5,913.12. This breakdown confirmed the end of the preceding uptrend and the emergence of a new bearish phase.

A non-failure swing pattern—often regarded as a reliable technical reversal signal—further reinforced the shift in sentiment. The subsequent formation of a “Death Cross,” marked by the 20-period Exponential Moving Average (EMA) crossing below the 50-period EMA, added another layer of technical confirmation, amplifying the prevailing downside bias.

Momentum indicators remain aligned with this bearish outlook. The Momentum Oscillator remains entrenched below the critical 100 level, suggesting a continuation of downward pressure, while the Relative Strength Index (RSI) continues to hold below the 50 threshold, signaling persistent selling interest. These factors collectively point to an environment where downside risks remain dominant unless key resistance levels are reclaimed.

Should the buyers take market control, traders may direct their attention toward the four potential resistance levels below:

5624.11: The initial resistance level is established at 5624.11, which mirrors the weekly support, S1, estimated using the standard Pivot Points methodology.

5770.25: The second price target is set at 5770.25, reflecting the trough from January 13.

5837.14: The third price objective is observed at 5837.14, corresponding to a daily low from February 28.

5913.12: An additional upside target is projected at 5913.12, mirroring the 61.8% Fibonacci Retracement drawn from 6149.50 to 5530.71.

Should the sellers maintain market control, traders may consider the four potential support levels listed below:

5530.71: The initial support level is seen at 5530.71, corresponding to the daily low marked March 3.

5484.10: The second support level is estimated at 5484.10, representing the weekly support, S2, calculated using the standard Pivot Points methodology.

5340.54: The third support level is identified at 5340.54, reflecting the 423.6% Fibonacci Extension drawn from 5837.14 to 5999.60

5300.86: An additional downside target is 5300.86, mirroring the weekly support, S3, estimated using the standard Pivot Points methodology.

Goldman Sachs has lowered its year-end target for the S&P 500 to 6,200 from 6,500, citing slowing GDP growth, higher assumed tariffs, and increased economic uncertainty. The bank also trimmed its earnings growth forecast to 7% from 9% and reduced the price-to-earnings ratio by 4%. This adjustment comes as other major banks express similar concerns over geopolitical risks and economic conditions. The S&P 500 has declined over 9% from its February peak, while recession fears and shifting market sentiment continue to influence equity forecasts.

With markets closely monitoring upcoming economic releases, sentiment remains cautious amid persistent bearish momentum in the S&P 500. Key technical indicators continue to signal downside risks, while fundamental concerns, including slowing growth and increased uncertainty, add pressure. As major data points unfold, market participants will assess their potential impact on price action and broader economic trends.