Daily Price Outlook

The S&P500 has risen 1.65% on the last day to trade at 3,919.29. US stocks recovered as anticipation of the extent of the rate rise at the Federal Reserve's policy meeting next week was muted by inflation data that was mostly on target and easing concerns about the spread in the banking sector.

US CPI Eases

On Tuesday, investors appeared to take hope in the fact that the risk of market spread from the Silicon Valley Bank crisis was reducing. However, the stability of the global banking industry under rising interest rates remained a focus.

Meanwhile, the CPI data from the US Labor Department revealed that consumer prices decreased in February, roughly in line with market forecasts, with both headline and core measures recording significant annual decreases.

The Consumer Price Index (CPI), which measures inflation in the US, decreased from 6.4% in January to 6% in February. The reading matched the expectations set by the market.

There is still a long way until inflation reaches the central bank's 2% target on an annual average. However, the chances that the Federal Reserve would adopt a 25 basis-point boost to its benchmark interest rate at the end of its two-day policy meeting on March 22 has grown in response to indications of economic softening and the regional banking crisis.

The US dollar fell as traders doubted the possibility of another rate increase by the Fed later this month in light of the US financial crisis and easing inflation. DXY is now trading down at 103.54. Moreover, the US 10-Year Treasury yield increased to trade at 3.666%.

After several days of risk-off instability, the S&P 500 finished significantly higher as bank fears decreased and inflation cooled.

Insulet was selected to take SVB's spot on the S&P 500 index.

The parent firm, SVB Financial Group, is no longer eligible for listing on the S&P 500 after authorities interfered and shut down Silicon Valley Bank. As a result, the bank dropped from the index before the markets opened on Wednesday, and Insulet took its place.

Insulet's inclusion in the S&P 500 comes just a few weeks after the company announced its highest-ever annual revenues, beating last year's record. The manufacturer of diabetes technology made $1.3 billion overall in 2022, an increase of more than 18% from the previous year.

The stock price rose sharply after news that Insulet would replace SVB on the S&P 500. Moreover, the S&P 500 performed better than anticipated.

S&P500 Intraday Technical Levels

Support      Resistance

3808.07       3904.26

3760.37       3952.75

3711.88       4000.45

Pivot Point: 3856.56

S&P500 – Technical Outlook

The S&P 500 (SPX) has encountered a hurdle near the $4,060 level, which is reinforced by a 50% Fibonacci retracement mark. As a result, the index has fallen once again from a technical standpoint. Closing candles below this level are indicating a sell zone for SPX, and the "three black crows" pattern in the 4-hour timeframe is contributing to the bearish sentiment among investors.

Currently, the SPX's immediate resistance level is at $4,095, which is supported by a 61.8% Fibonacci correction level on the upside. A bullish breakout above the $4,035 level could lead to further gains towards the $4,200 mark. However, if the support level at $3,930 is broken, the SPX may drop towards the next support level at $3,880.

Daily Price Outlook

The S&P500 is trading at 3,861.59, down by 1.45% in 24 hours. Stock markets have fallen due to stronger-than-expected NFP data, and worries about bank contagion after the failure of SVB.

The collapse of Silicon Valley Bank

Silicon Valley Bank (SVB) Financial Group's surprise failure and FDIC seizure on Friday motivated a fast Fed meeting on Monday. The US authorities responded to limit the consequences of the unexpected collapse.

The Federal Reserve acted quickly to loosen the limits on bank borrowing. Furthermore, the White House promised to pay any withdrawals for SVB depositors.

The Fed and the FDIC are making great efforts to ring-fence SVB and stop contagion, but this worry is disturbing the market. Investors also believe that the Fed is far less likely to raise interest rates since doing so could bring down any other banks. According to the Fed Rate Monitor Tool, more traders anticipate a 25 basis point increase in interest rates from the Fed this month versus a 50 basis point increase.

Although depositors are likely to withdraw their funds from the bank, there are concerns about contagion. As a result, global markets closed the week in a sharp decline, with the S&P 500 Index closing at its lowest level in more than two months.

US NFP report

The US non-farm payroll statistics released on Friday showed 311k new employment opportunities occurred last month versus the 224k anticipated. Moreover, the unemployment rate grew from 3.4% to 3.6%, while average hourly wages only increased by 0.2%.

Overall, this news would have probably been a bit optimistic for the US Dollar if not for the worry of bank contagion.

The outcome was a sharp decline in the dollar relative to a basket of currencies, with DXY trading at 0.76% and down at 103.78. The current price of the US 10-Year Bond Yield is 3.670%, down by 0.68%.

Looking ahead, traders are looking forward to the release of the US consumer price index on Tuesday.

S&P500 Intraday Technical Levels

Support      Resistance

3879            3988

3839            4057

3770            4097

Pivot Point: 3948

S&P500 – Technical Outlook

The S&P 500 (SPX) has faced resistance near the $4,060 level, which is extended by a 50% Fibonacci retracement mark, causing the index to drop again from a technical perspective. Candles closing below this level are keeping SPX in a sell zone, and the "three black crows" pattern in the 4-hour timeframe adds to the bearish bias among investors.

The SPX's immediate resistance level is $4,095, supported by a 61.8% Fibonacci correction level on the upside. A bullish breakout above the $4,035 level may lead to further gains toward the $4,200 mark. However, in the event of a breakdown below the support level of $3,930, the SPX may drop toward the next support level at $3,880.

Daily Price Outlook

The S&P500  is trading at 3,992.01, up 0.14% in the last 24 hours. The index gained ground as investors struggled to make sense of mixed statements made by Federal Reserve Chair Jerome Powell and US economic data ahead of upcoming labor and inflation reports.

The upcoming data is anticipated to influence the central bank's rate hike plan.

US Economy and Fed Rate Hikes

On his second day of testimony before Congress on Wednesday, Powell reiterated his message of potentially higher and quicker interest rate increases, which he had already stated on Tuesday. However, he hinted that the decision on the next rate hike would depend on the data released prior to the Fed's March meeting.

In addition, data released on Wednesday showed that US private payrolls rose more than expected in February, but this did little to ease concerns about the potential for higher interest rates.

Another report indicated that US JOLTS Job Openings decreased in January, but less than anticipated. Despite the decrease, the data suggested that the labor market remained tight, with job openings falling to 10.82 million. This has raised concerns that the Fed may continue its plan to raise interest rates for an extended period.

Traders continued to increase their bets on a 50 basis point interest rate hike by the US central bank later this month. CME Group's FedWatch tool indicated a nearly 80% chance of such a rise, up from roughly 70% on Tuesday.

The dollar remained stable for the day but fell from its three-month highs as Federal Reserve Chairman Jerome Powell provided no new insights during his second day of congressional testimony. The DXY dropped to 105.57 as investors awaited Friday's employment data. Meanwhile, the US 10-Year Treasury Yield increased to 3.997%.

S&P Sectors

Six out of the 11 major sectors of the S&P were down, with energy showing the largest decline at 1.3%. On the other hand, real estate saw the highest increase, rising by 0.96%.

Despite a general market downturn, airline stocks survived after the Justice Department filed a lawsuit to halt JetBlue's acquisition of Spirit Airlines. United Airlines saw a 3% increase, while American and Delta had gains of 1.5% and 1.6%, respectively.

Occidental Petroleum Corp. saw a 1.8% increase after Warren Buffett's Berkshire Hathaway Inc. raised its ownership to approximately 22.2% in the oil company.

However, Tesla Inc. fell by 3.3% after the U.S. auto safety agency announced a preliminary inquiry on 120,000 Model Y 2023 vehicles due to reports of steering wheels coming off while driving.

S&P500 Intraday Technical Levels

Support      Resistance

3961            4031

3936            4075

3891            4101

Pivot Point: 4006

S&P500 – Technical Outlook

The S&P 500 (SPX) has faced resistance near the $4,060 level, which is extended by a 50% Fibonacci retracement mark, causing the index to drop again from a technical perspective. Candles closing below this level are keeping SPX in a sell zone, and the "three black crows" pattern in the 4-hour timeframe adds to the bearish bias among investors.

The SPX's immediate resistance level is $4,095, supported by a 61.8% Fibonacci correction level on the upside. A bullish breakout above the $4,035 level may lead to further gains toward the $4,200 mark. However, in the event of a breakdown below the support level of $3,930, the SPX may drop toward the next support level at $3,880.

Daily Price Outlook

The S&P500 (SPX) is currently trading at $4,045.64, representing an increase of 1.61% in the past 24 hours. The surge in the S&P 500 was due to the decrease in US Treasury rates and investors' acceptance of the increasing possibility that the Federal Reserve will maintain its tight monetary policy until the end of the year.

Fed rate hikes speculations

The previous week's US statistics sparked concerns about the hawkish stance of the Federal Reserve (Fed). However, the Fed's semi-annual Monetary Policy Report released on Friday stated explicitly that the Fed funds rate target must continue to increase, with a commitment to bringing inflation back to 2%.

Investors will be watching the US employment data for February on Friday and Jerome Powell's testimony before Congress for any updates on the direction of interest rates.

Powell is scheduled to speak before Congress and provide the central bank's semi-annual report on monetary policy, speaking before the Senate on Tuesday and the House of Representatives on Wednesday.

Market participants will closely watch his comments for indications of whether a higher rate rise is being considered this month after recent US statistics indicated continuing inflation.

Traders expect the Fed to raise interest rates by another 25 basis points this month, with market pricing now indicating a higher probability of a rise than in the past. The dollar held steady on Monday at around 104.43 after facing severe losses the previous week. The US 10-Year Bond Yield fell by 0.68% to 3.936.

Corporate earning

Due to high inflation and the Federal Reserve's interest rate hikes, corporate America has experienced some sharp and disappointing earnings results. Almost 99% of S&P 500 companies have already released their Q4 earnings, and the results have been particularly disappointing for the tech sector.

IT companies had a dismal performance in the last quarter, with Apple reporting an unusual earnings miss, while Intel and Alphabet, the parent company of Google, underperformed forecasted earnings.

However, not all was negative, as energy firms generated record profits for another quarter, with Chevron, ConocoPhillips, Exxon, and Shell recording their most profitable years ever. Tesla also announced record revenue growth and exceeded profit expectations. Target and Walmart also outperformed forecasts as US consumers continued to spend.

On average, S&P 500 index business earnings last quarter were only slightly above analyst expectations by around 1.3%.

S&P500 Intraday Technical Levels

Support      Resistance

3943            4005

3904            4029

3880            4068

Pivot Point: 3967

S&P500 – Technical Outlook

From a technical perspective, the S&P 500 (SPX) has rebounded from the support zone at the $3,930 level. The appearance of the "three white soldiers" pattern in the 4-hour timeframe increases the possibility of a bullish rebound.

On the upside, the SPX's immediate resistance level is at $4,095, supported by a 61.8% Fibonacci correction level. A bullish breakout of the $4,035 level may lead to further gains toward the $4,200 mark.

However, in the event of a breakdown below the support level of $3,930, the SPX may drop toward the next support level at $3,880.

Daily Price Outlook

The S&P500 is currently trading at $3,951.04, representing a 0.47% decrease in the past 24 hours. The decline in the S&P 500 was driven by manufacturing data indicating that inflation may remain persistently high, along with an increase in Treasury rates and hawkish remarks from Federal Reserve policymakers, which reinforced a stringent policy stance.

Federal Reserve Officials Suggest Aggressive Hikes in Interest Rates

The latest PMI data from S&P Global indicates a grim outlook for US manufacturing companies. The manufacturing PMI for February came in at 47.7%, which was 0.3% points higher than January's figure of 47.4%.

Despite the data showing the slowest rate of decline in three months, the sector's health has deteriorated as producers of goods struggle.

The ISM survey showed that US manufacturing contracted in February, while raw material costs increased, causing the yield on 10-year notes to rise above 4% for the first time since November. The Dollar index also gained momentum, trading at 104.59.

Investors remain focused on the Federal Reserve's interest rate trajectory. On Wednesday, Fed officials made statements supporting the idea that the most effective way to combat inflation is through aggressive interest rate hikes.

Moreover, the PMI data suggests that inflationary pressures have resurfaced, indicating that the Fed should not hastily conclude its tightening policy cycle.

How Corporate Earnings Reports Affected the SPX?

In the stock market, Lowe's Companies saw a 6% drop in its share price after it reported fourth-quarter revenue that fell short of Wall Street's expectations. The company also provided annual sales guidance that did not meet the projected figures.

Tesla also garnered attention as it began its investor day, during which the EV maker was expected to present its Master Plan 3 and provide insights into its long-term development strategy.

Snowflake's share price fell 7.3% after the company announced its Q4 earnings of $0.14 per share, falling short of the projected $0.05 on revenue of $589 million compared to the anticipated $576.22 million.

On the other hand, Okta's share price rose 13.7% after the company reported its Q4 earnings per share of $0.30, surpassing the estimated $0.09, and revenue of $510 million compared to the projected $489.79 million.

S&P500 Intraday Technical Levels

Support      Resistance

3978.24       4037.35

3944.16       4062.38

3919.13       4096.46

Pivot Point: 4003.27

S&P500 – Technical Outlook

Technically, the S&P 500 (SPX) is experiencing a bearish trend, having dropped to $3,950 after breaking an upward channel at $4,100. The SPX's current support level is $3,950, supported by a double-bottom pattern. If this support level is broken, the S&P 500 may continue to fall, possibly to $3,885. On the other hand, the S&P 500's resistance level is at $4,000 or $4,075.

Later today, market participants will pay attention to FOMC Member Waller's speech at 9:00 pm.