empty
04.03.2025 09:29 AM
Will the U.S. Stock Market Continue to Decline? (Potential Drop in #SPX and #NDX)

The U.S. economy is losing growth momentum, which raises concerns for investors in American financial assets amid uncertainty due to a trade war initiated by Donald Trump against U.S. trading partners.

Data from the Institute for Supply Management (ISM) on Monday showed that the Manufacturing PMI fell to 50.3 in the past month from 50.9 in January, below the expected 50.5. The index indicates slower growth in the manufacturing sector due to declining demand, production stabilization, and job cuts. Companies show signs of an initial operational shock from the new administration's tariff policies. Rising prices due to Trump's trade policies have already caused delays in placing new orders, disruptions in supplier deliveries, and an impact on production resources.

New orders have dropped significantly since March 2022, falling to 48.6 from 55.1. Employment has also declined to 47.6 from 50.3, nearing the contraction threshold of 50. The report also points to a sharp slowdown in production, dropping to 50.7 from 52.5 in the previous month. Additionally, price pressures have surged to their highest level since June 2022, rising to 62.4 from 54.9. A similar trend is observed in other manufacturing inventory indicators.

With Canada and Mexico expected to join the trade war against the U.S. today, a 25% tariff on imports from these countries is anticipated. Coupled with signs of a slowing national economy, the U.S. stock market continues its freefall after a brief rebound late last week. This is further exacerbated by China's decision to impose retaliatory tariffs of up to 15% on certain U.S. goods starting March 10. The release of pessimistic economic data, concerns over import tariffs, and geopolitical tensions between Washington and Ukraine have already impacted U.S. stock indices, which fell between 1.5% and 2.5% on Monday.

Crude oil prices for BRENT and WTI remain in a short-term downtrend, experiencing their steepest decline since mid-January. A key factor in this drop was the announcement that OPEC+ will continue its planned production increase in April. This raised fears of rising global supply, which will likely put downward pressure on oil prices. Additionally, the prospect of new U.S. tariffs on imports from Canada and Mexico could slow economic growth and reduce oil demand.

The cryptocurrency market experienced a brief rebound over the weekend, sparked by statements from Trump on Truth Social. He claimed that a U.S. crypto reserve would "elevate this critical industry" and reverse the restrictive policies of the previous administration. However, the market crashed on Monday and continues to decline this morning, erasing all previous gains.

Looking at the broader picture, it is clear that Trump's administration is dismantling the geopolitical and economic frameworks established by the Democrats. However, it has yet to produce any tangible positive results—something that would be challenging to achieve in just a month and a half of his presidency.

This image is no longer relevant

This image is no longer relevant

Market Forecast for the Day

#SPX

The S&P 500 CFD contract remains under pressure but is still within the 5807.00–6124.80 range. If the decision to impose higher tariffs on Canadian and Mexican goods is confirmed today, and if Trump signals that this is only the beginning, we could see a breakdown of the lower boundary of this range, leading to a drop to 5700.00.

#NDX

The NASDAQ 100 CFD contract is also under pressure, trading near its support level of 20,500. The technology sector feels the strain from China's retaliatory tariffs, which could significantly impact U.S. tech companies. A further deterioration in the situation could push the contract down to 19,863.00.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Viktor Vasilevsky
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/CAD. Analysis and Forecast

On Wednesday, the USD/CAD pair enters a phase of bullish consolidation, fluctuating just below the five-week high reached the day before. Traders are holding off on aggressive positions ahead

Irina Yanina 12:49 2025-07-30 UTC+2

USD/JPY. Analysis and Forecast

During the Asian session today, the Japanese yen strengthened against the weakening U.S. dollar. However, the yen's upward potential is likely to remain limited, as traders may hold

Irina Yanina 12:23 2025-07-30 UTC+2

Trump's Trade Deals Lack Sufficient Detail

It's clear that the Federal Reserve's hesitation to cut interest rates due to inflation risks at home is partly justified by the lack of substantive details in the trade agreements

Jakub Novak 11:35 2025-07-30 UTC+2

Why Are Markets Riding a Wave of Optimism? (There is a likelihood of rising oil prices and declining gold prices)

Recent events—including victorious declarations from Washington about agreements on customs tariffs with Japan and the EU—continue to support demand for risk assets. At least for now, investors are not concerned

Pati Gani 10:16 2025-07-30 UTC+2

The Fed Unlikely to Send Clear Signals

While the euro and British pound show modest gains against the U.S. dollar, investors hoping for Jerome Powell to hint that the Federal Reserve is moving closer to a rate

Jakub Novak 09:54 2025-07-30 UTC+2

The Market Welcomes the Truce

The final word in the U.S.–China trade negotiations is expected from Donald Trump. Until that happens, the S&P 500 has decided to take a step back—especially with key U.S. data

Marek Petkovich 09:05 2025-07-30 UTC+2

What to Pay Attention to on July 30? A Breakdown of Fundamental Events for Beginners

A considerable number of macroeconomic reports are scheduled for Wednesday. Germany, the Eurozone, and the United States will all release Q2 GDP reports. It is worth noting that while

Paolo Greco 07:07 2025-07-30 UTC+2

GBP/USD Overview – July 30: The Pound Keeps Falling "in Sympathy"

The GBP/USD currency pair continued its decline on Monday and extended the move into Tuesday. It's worth noting that the British pound began falling earlier than the euro, already last

Paolo Greco 03:48 2025-07-30 UTC+2

EUR/USD Overview – July 30: Beating the Fallen

The EUR/USD currency pair continued its downward movement on Tuesday, driven by the same factors as on Monday—as we warned in advance. On Monday, it was revealed that the European

Paolo Greco 03:48 2025-07-30 UTC+2

The Fed Will Remain in Wait-and-See Mode Until September

There will likely be some dovish hints, but they will probably not differ from previous statements and rhetoric by Federal Reserve officials. This is the general expectation one day before

Chin Zhao 01:14 2025-07-30 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.