U.S. Stock Futures Dip as Trade Tariff Concerns and Economic Data Weigh on Market Outlook

U.S. stock index futures fell slightly on Sunday evening, reflecting investor concerns about the potential impact of renewed trade tariff threats from President-elect Donald Trump. As Wall Street nears record highs, attention shifts to key economic data points this week, particularly the November jobs report and commentary from Federal Reserve Chair Jerome Powell. With the Fed poised to cut interest rates by 25 basis points in December, investors are hoping the data will offer clarity on the economy’s health and further guidance on the central bank’s approach in 2025. However, the longer-term outlook remains clouded by inflationary pressures and the potential economic consequences of Trump's protectionist policies.

The rally on Wall Street on Friday, with record highs for the S&P 500, Dow Jones, and Nasdaq, was driven by a combination of strong performance from technology stocks—especially Nvidia—and optimism around consumer spending. As the holiday shopping season kicked off, retail stocks saw notable gains, with consumers projected to spend a record $10.8 billion online for Black Friday, signaling robust demand. However, concerns linger over the longer-term impact of tariffs, which could erode profit margins in the retail sector, particularly for import-heavy industries. Retailers' ability to manage inventory and costs will be increasingly crucial as tariffs continue to affect global supply chains.

Chip stocks, which had suffered declines earlier in the week, rebounded, helping drive broader market gains. Small-cap stocks also outperformed, contributing to a bullish market sentiment in the wake of Trump's election. Still, analysts caution that this recent small-cap outperformance may not be sustainable. While some sectors, such as industrials and information technology, are benefiting from a favorable economic environment, other areas, such as consumer discretionary, are seeing weaker growth, casting doubt on the durability of the market’s recent rally.

Additionally, while many investors are betting that the Fed will continue to ease rates, inflationary concerns are growing. Trump's policies, particularly on trade, may keep inflationary pressures elevated, potentially leading to slower economic growth and fewer rate cuts in 2025. The Federal Reserve is expected to navigate these challenges carefully, balancing between stimulating growth in the short term and preventing inflation from accelerating. The broader economic picture remains uncertain, with many economists projecting that the slow pace of fiscal stimulus and the Fed’s policy direction will weigh on growth next year.

Data for Technical Analysis (1H) CFD US 500 [S&P 500]

Resistance : 6026.0, 6027.0, 6028.5

Support : 6023.0, 6022.0, 6020.5   

1H Outlook  

Source: TradingView 

Buy/Long 1 If the support at the price range 6019.0 - 6023.0 is touched, but the support at 6023.0 cannot be broken, the TP may be set around 6026.3 and the SL around 6017.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 6026.0 - 6030.0, TP may be set around 6034.0 and SL around 6021.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 6026.0 - 6030.0 is touched, but the resistance at 6026.0 cannot be broken, the TP may be set around 6022.3 and the SL around 6032.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 6019.0 - 6023.0, TP may be set around 6016.0 and SL around 6028.0, or up to the risk appetite.       

Pivot Points Dec 2, 2024 05:51AM GMT