S&P500 (SPX) Price Analysis – February 23, 2023

Daily Price Outlook

The S&P500 stock market index is currently trading at $3,991.05, down 0.16% within the last 24 hours. The index is experiencing a decline as investors grow increasingly apprehensive about potential aggressive interest rate increases, following the release of positive US economic data in recent times.

Impact of Hawkish FOMC Minutes on SPX

The Federal Reserve's recent meeting minutes revealed that the officials are prepared to continue raising interest rates in order to curb the increasing inflationary pressures. The majority of Fed policymakers believed that a 25 basis point hike was appropriate, while only a few supported a 50bp rate increase to control the rising inflation.

Furthermore, the hawkish stance of the Fed minutes was supported by the fact that several members believed there was a high likelihood of a recession in 2023. As a result, the S&P 500 is falling as the Fed's indication of a willingness to raise rates, in the long run, has raised concerns about inflation.

Geopolitical Concerns Weigh on S&P 500

Russian President Vladimir Putin recently met with Chinese diplomat Wang Yi in Moscow. The two officials vowed to strengthen relations between Russia and China, stating that their close relationship in the economy, politics, and culture is not subject to outside criticism.

However, the close ties between China and Russia have raised geopolitical concerns, especially with the US opposing such actions.

The ongoing conflict between the US and China has also fueled new concerns about the Ukraine-Russia war. As a result, the S&P 500 has continued to decline amid growing geopolitical worries.

Economic Warnings from Walmart and Home Depot

The retail sector may face a challenging year ahead, as indicated by the outlooks of Walmart and Home Depot. Walmart reported better-than-expected earnings in the Holiday quarter on February 21, citing cost-conscious consumers seeking lower-priced food, gifts, and home products.

Home Depot, which also announced its fiscal fourth-quarter earnings on the same day, gave similar guidance. The home improvement company anticipates flat same-store sales as consumers limit spending due to increasing inflation and interest rates.

The negative outlooks from both retailers have contributed to a drop in the S&P 500, adding to concerns about the rapid rise in interest rates and high inflation.

S&P500 Intraday Technical Levels

Support      Resistance

3969.98         4005.98

3957.84         4029.84

3933.98         4041.98

Pivot Point: 3993

S&P500 – Technical Outlook

From a technical standpoint, the S&P 500 (SPX) is currently trading bearish, having dropped to the $3,990 level. It has broken an upward channel at the $4,100 level, which has strengthened the downtrend so far.

SPX's current support level is at $3,950, which is also supported by a double-bottom pattern. A break below this support level may cause the S&P 500 to drop further toward the $3,885 mark.

On the other hand, the resistance level remains at the $4,000 or $4,075 mark. Today's release of the US Preliminary GDP is highly anticipated and could significantly impact the pricing of the US stock markets.

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