S&P500 (SPX) Price Analysis – March 01, 2024

Daily Price Outlook

Despite geopolitical tensions, the S&P 500 index maintained its upward rally and surged to a new record high above the 5,104 mark. However, the reason for its upward trend can be attributed to the optimism surrounding the US economy and upbeat inflation data. It should be noted that the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, came in as expected, showing a modest increase of 0.4% in January. Meanwhile, the core PCE, which excludes volatile food and energy prices, grew by 2.8% year-over-year, matching market expectations. Therefore, these figures showed that inflation was slowing down, which could lead to the Federal Reserve cutting interest rates in the future to boost economic growth.

Moreover, the US economy remained strong, as both the Dow Jones Industrial Average and S&P 500 had their best two-month start since 2019. This, along with positive corporate earnings, boosted investor confidence and pushed the S&P 500 to reach new highs.

Federal Reserve's Interest Rate Cut Stance and US Economic Data

On the US front, the Federal Reserve's stance on interest rates and US economic data played a major role in boosting the performance of the S&P 500. Notably, the release of the PCE inflation data had been anxiously anticipated by investors throughout the week. However, the released figures indicated that the Federal Reserve might consider rate cuts later in the year to support economic growth. This prospect boosted investor sentiment and contributed to the upward trend of the S&P 500.

On the flip side, Federal Reserve officials like Raphael Bostic and John Williams reiterated their readiness to cut interest rates if needed. This boosted market confidence in potential rate cuts, pushing the S&P 500 higher.

Geopolitical Tensions and Their Impact on S&P 500

Despite geopolitical tensions, including the ongoing conflict between Israel and Gaza, the S&P 500 maintained its upward momentum. However, geopolitical unrest, such as the Israel-Gaza conflict, typically introduces uncertainty into financial markets. Nevertheless, the S&P 500 remained strong as Investors focused primarily on domestic economic indicators and Federal Reserve policies, which overshadowed geopolitical concerns in the short term.

S&P500 (SPX) - Technical Analysis

In today's technical outlook for the S&P500 (SPX) on March 1st, the index demonstrates a notable upward movement, currently standing at $5096.28, marking an increase of 0.52% over the past 24 hours. Analyzing the market through a 4-hour chart timeframe provides traders with valuable insights into short-term price dynamics, aiding in strategic decision-making. 

Key price levels have been identified, with the pivotal point situated at $5081.06, serving as a critical level for potential reversals or continuations of the current trend. Notable resistance levels are observed at $5110.04, $5133.95, and $5154.05, indicating areas where price action may encounter obstacles. Conversely, significant support levels are identified at $5058.09, $5032.45, and $5004.14, signifying potential levels of market demand.

Technical indicators offer further guidance to traders, with the Relative Strength Index (RSI) currently at 64, suggesting a bullish momentum in the market. Additionally, the 50-day Exponential Moving Average (EMA) at $4987.05 acts as a dynamic level of support, reinforcing the prevailing uptrend.

Considering these factors holistically, the overall trend for the S&P500 leans towards bullish territory. Traders may find potential opportunities to initiate long positions above the entry price of $5070, with a target take-profit level set at $5130. To mitigate risk effectively, a stop-loss order could be placed at $5045, enabling traders to manage potential losses in the event of adverse price movements.