U.S. Stocks Decline Amid Pre-Inflation Data Jitters

U.S. stocks experienced a decline at the beginning of the trading week across various sectors, including Technology, Industrials, and Financials, as investors prepared for upcoming inflation data. Following significant gains in the previous week, the Dow and S&P 500 slipped as investors assessed the Federal Reserve's stance on interest rates ahead of key inflation figures scheduled for release later in the week, resulting in all three major U.S. stock indexes closing lower, with the Dow facing the largest percentage loss.

Despite a positive trend in major artificial intelligence (AI) stocks during aftermarket trading, overall sentiment on Wall Street appeared to cool following last week's record highs. Regulatory actions against prominent technology companies also contributed to subdued market sentiment.

Last week marked significant gains for the S&P 500, posting its largest weekly percentage increase since mid-December. Market analysts suggest that a market correction might be imminent, considering the S&P 500's substantial 27% gain since late October.

Some investors remain optimistic, believing that the market's upward trend will continue, particularly as mega-cap stocks demonstrate their resilience. Goldman Sachs predicts further gains in the S&P 500, emphasizing the strength of mega-cap stocks.

Looking ahead, the S&P 500 is poised to enter its 11th year in the current bull market, with historical comparisons suggesting the potential for continued growth until at least 2029. Growth stocks continue to outperform Value stocks, with AI-related companies driving much of the market's recent success.

The stock market's performance this year has been largely influenced by expanding price-to-earnings multiples rather than earnings growth. Analysts highlight the importance of central bank policies in maintaining current high equity valuations.

The Nasdaq experienced fluctuations throughout the trading session, with gains in chipmakers such as Nvidia and Micron Technology providing support. However, concerns arose after reports that China plans to phase out U.S. microprocessors in government computers.

Boeing's stock rose following significant management changes, while United Airlines faced a decline due to increased regulatory oversight.

Tech giants Apple, Meta Platforms, and Alphabet faced scrutiny from EU regulators, impacting their stock performance. Walt Disney Company saw an increase following an upgrade from Barclays, amidst ongoing proxy battles and management controversies.

Federal Reserve officials reiterated cautious approaches to interest rate changes, with upcoming inflation data and speeches likely to influence market sentiment. Consequently, it could impact the broader U.S. stock market, potentially maintaining a positive trajectory during this period. However, ongoing volatility persists, posing a risk of reversal.

Data for Technical Analysis (5H) CFD US 500 [S&P 500]

Resistance : 5227.6, 5229.0, 5231.3

Support : 5223.0, 5221.6, 5219.3                            

5H Outlook

Source: Investing.com                                          

Buy/Long 1 If the support at the price range 5213.0 - 5223.0 is touched, but the support at 5223.0 cannot be broken, the TP may be set around 5228.5 and the SL around 5208.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 5227.6 - 5237.6, TP may be set around 5242.0 and SL around 5218.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 5227.6 - 5237.6 is touched, but the resistance at 5227.6 cannot be broken, the TP may be set around 5222.5 and the SL around 5243.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 5213.0 - 5223.0, TP may be set around 5208.0 and SL around 5233.0, or up to the risk appetite.       

Pivot Points Mar 26, 2024 03:18AM GMT