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
Summary
Urgency
Analytic
Igor Kovalyov
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Chancy Deposit
    Deposit your account with $3,000 and get $4000 more!
    In July we raffle $4000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST

Recommended Stories

EUR/JPY. Analysis and Forecast

Today, the EUR/JPY pair is regaining positive momentum after yesterday's pullback from the 173.25 level, which now marks the yearly high, and is maintaining intraday growth. Spot prices are currently

Irina Yanina 19:08 2025-07-17 UTC+2

USD/CAD. Analysis and Forecast

On Thursday, the USD/CAD pair received support from buyers and rose above the key 1.3700 level, driven by the overall strengthening of the US dollar. Spot prices have corrected

Irina Yanina 12:14 2025-07-17 UTC+2

Not Everyone at the Fed Agrees with Powell

Given the current confusion within the Federal Reserve and the mounting pressure on its Chair Jerome Powell, not all policymakers agree that interest rates should remain elevated. Thomas Barkin, President

Jakub Novak 11:43 2025-07-17 UTC+2

The Dollar Was Shaken Yesterday — Here's Why

The U.S. dollar came under heavy selling pressure yesterday following media reports suggesting that Federal Reserve Chair Jerome Powell might be dismissed in the near future. This unexpected development triggered

Jakub Novak 11:38 2025-07-17 UTC+2

The Fed Needs to Be Patient

While the U.S. dollar continues to show high volatility driven by Trump's statements, Susan Collins, President of the Federal Reserve Bank of Boston, once again stated in an interview that

Jakub Novak 11:30 2025-07-17 UTC+2

What's Holding Back a Confident Rally in the U.S. Stock Market? (Moderate upside potential for #SPX and #NDX contracts remains)

The U.S. stock market has been consolidating for the second consecutive week amid conflicting signals that continue to set the tone for equity movements in the current environment. What's behind

Pati Gani 10:13 2025-07-17 UTC+2

The Market Stands Firmly Behind the Fed

Trump always backs down. And the U.S. President skillfully manipulates the markets. It is quite possible that the rehearsal for firing Jerome Powell was his idea. The goal

Marek Petkovich 09:05 2025-07-17 UTC+2

What to Pay Attention to on July 17? A Breakdown of Fundamental Events for Beginners

Several macroeconomic releases are scheduled for Thursday. In the United Kingdom, data on unemployment, jobless claims, and wages will be published. However, it's worth noting that the market ignored yesterday's

Paolo Greco 07:41 2025-07-17 UTC+2

GBP/USD Overview – July 17: The UK Has Accepted Trump's Terms. Consequences

The GBP/USD currency pair also traded more calmly on Wednesday compared to Tuesday, although a surge occurred in the evening. Let us recall that we do not consider Tuesday's decline

Paolo Greco 03:21 2025-07-17 UTC+2

EUR/USD Overview – July 17: U.S. Inflation Will Only Accelerate

The EUR/USD currency pair traded more calmly on Wednesday than it had on Tuesday, remaining relatively stable until the evening. There were no major fundamental or macroeconomic events in either

Paolo Greco 03:21 2025-07-17 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.