The S&P 500 is currently trading below its 200 EMA and testing key support levels, with tomorrow’s NFP report poised to impact market direction further.
Key Points
- The S&P 500 fell -0.53% today after a +0.21% gain on Wednesday, reflecting market volatility.
- Rising oil prices, driven by Middle East tensions, are pressuring equities and increasing costs.
- U.S. labor data improved, but inflation concerns persist with 10-year Treasury yields rising to 3.8%.
S&P 500 Daily Price Analysis – 03/10/2024
The S&P 500 closed Wednesday at 5,723.85, posting a modest gain of +0.21% from its open of 5,714.35. However, today’s trading has seen a reversal, with the index dropping to 5,693.08 after opening at 5,724.15, reflecting a -0.53% decline. This movement is part of the broader market volatility driven by geopolitical tensions and mixed economic signals.
Geopolitical Tensions and Oil Price Surge
One of the key factors pressuring equities, including the S&P 500, is the surge in oil prices. Brent crude has climbed more than 4% this week, fueled by concerns over escalating tensions between Israel and Iran, raising fears of a wider conflict that could disrupt global oil supplies. Brent futures were up 1.2%, trading just below $75 a barrel, signaling traders’ concerns about further instability.
Higher energy prices tend to push up costs across sectors, particularly for industries sensitive to fuel, such as transportation and manufacturing. If these companies cannot pass rising costs onto consumers, profit margins may shrink, further weighing on the S&P 500.
Mixed U.S. Economic Data and Treasury Yields
Wednesday’s ADP report revealed an uptick in private-sector hiring for the first time in six months, easing concerns about the labor market ahead of tomorrow’s all-important NFP report.
However, despite encouraging labor data, rising inflationary pressures, especially from climbing oil prices, could complicate the Federal Reserve’s decision-making. This concern is reflected in the 10-year U.S. Treasury yield, which edged higher to 3.8%, pointing to increasing investor concerns about inflation.
International Market Pressure and Investor Sentiment
The global picture remains volatile as well. U.S.-listed Chinese stocks, including Alibaba, fell in premarket trading, reflecting the fading effects of China’s recent stimulus measures. Additionally, Hong Kong’s Hang Seng Index dropped 1.5%, pulling back after a strong rally in recent weeks, further contributing to the S&P 500’s struggles.
In the U.K., the British pound fell 1% against the dollar after the Bank of England indicated it may cut rates more aggressively if inflation continues to ease. Meanwhile, expectations are rising that central banks in Europe and New Zealand will also move toward rate cuts as economic activity softens, with key services PMI data expected to show contraction across much of Europe.
Key Economic Data and News to Be Released Today
The S&P 500’s near-term direction will be shaped by several critical factors, chief among them tomorrow’s NFP report. A strong labor market reading could bolster confidence in the U.S. economy but might also reignite fears of further rate hikes, particularly if inflationary pressures from rising oil prices persist. On the other hand, any geopolitical escalation in the Middle East could drive energy prices higher and further unsettle global markets.
Additionally, the market will continue to watch the release of today’s U.S. jobless claims and services PMI data, alongside international developments like European services PMIs and rate decisions from other major economies.
S&P 500 Technical Analysis – 03/10/2024
The S&P 500 keeps biting the dust from a technical analysis perspective. The index is currently trading below the 200 EMA, while the RSI is bouncing off the 50 level to the downside.
However, the S&P 500 is currently testing a series of support levels with the hope to either retrace from there to the upside or to continue its bearish movement after closing below them.
S&P 500 Fibonacci Key Price Levels 03/10/2024
Traders should keep a close eye on the following key price levels for the day:
| Support | Resistance |
| 5691.58 | 5728.25 |
| 5680.25 | 5739.58 |
| 5661.92 | 5757.92 |
Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
