FX.co ★ US stock market rebounds from support levels ahead of high-impact news

S&P500

Market review on March 05

Market participants faced the same challenges that have dominated discussions recently: concerns over economic growth and tariff uncertainty.

The trade war escalated as the 25% tariffs on Canada and Mexico took effect yesterday, while tariffs on China increased by 10-20%, prompting these countries to announce retaliatory measures.

Concerns over economic growth remained in focus following reports and forecasts from Target (TGT 117.14, -3.62, -3.0%) and Best Buy (BBY 75.20, -11.54, -13.3%). Retailers warned of looming price increases, which could erode consumer demand, dent revenue, and slow economic growth. Target's CEO also emphasized that consumers are already exhibiting caution.

The Dow Jones Industrial Average fell 1.6%, the S&P 500 declined 1.2%, and the Nasdaq Composite posted a 0.4% loss.

However, some improvement occurred midday as the S&P 500 approached its 200-day moving average of 5,725.

The Nasdaq Composite briefly traded above its previous close, reaching its session high, helped by gains in some mega-cap stocks before selling pressure resurfaced. NVIDIA (NVDA 115.99, +1.93, +1.7%) rebounded after falling as much as 3.4% at its session low.

Other mega-cap stocks that contributed to the midday rebound turned negative again as sellers took advantage of the rally. Among them was Amazon.com (AMZN 203.80, -1.22, -0.6%), which had risen 0.9% after bouncing off its 200-day moving average (198).

In the end, 10 out of 11 sectors in the S&P 500 closed lower. The financial sector, which accounts for 14.7% of the S&P 500's market cap, dropped 3.5%, while six other sectors saw losses of more than 1.0%.

There were no high-impact economic reports from the US on Tuesday.

Year-to-date performance:

Dow Jones Industrial Average: -0.1%

S&P 500: -1.8%

S&P Midcap 400: -4.6%

Nasdaq Composite: -5.3%

Russell 2000: -6.8%

Key economic data due on Wednesday:

• 7:00 AM ET: MBA Weekly Mortgage Index (previous: -1.2%)
• 8:15 AM ET: February ADP Employment Change (consensus: 145K; previous: 183K)
• 9:45 AM ET: Final February S&P Global Services PMI (previous: 49.7)
• 10:00 AM ET:
• 10:30 AM ET: Weekly Crude Oil Inventories (previous: -2.33M)

February ISM Services Index (consensus: 53.0%; previous: 52.8%)

January Factory Orders (consensus: 1.3%; previous: -0.9%)

Energy market

Brent Crude is now trading at $70.80. Oil prices fell further as renewed concerns over US economic prospects pushed prices to their lowest levels this year.

Conclusion

The US stock market still has room for growth. S&P 500 levels are attractive for early buyers, but it is crucial to maintain a financial buffer in case of another wave of selling pressure.