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14.03.2025 02:01 PM
Stock Market on March 14th: S&P 500 and NASDAQ Indexes Continue to Decline

Futures on the S&P 500 and NASDAQ stock indices continued their significant decline, returning to a bearish scenario.Asian stocks, along with futures on U.S. and European stock indices, rose during morning trading, slightly correcting after yesterday's sell-off. Pressure on the U.S. stock market resurfaced yesterday amid the risk of a government shutdown due to a lack of agreement on raising the U.S. debt ceiling, further deteriorating investor sentiment.

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Japanese and Australian stocks gained, while China's CSI 300 index reached its highest level this year, reflecting renewed optimism about the potential for greater policy support to boost consumer spending.

U.S. Treasury bonds pared some of their previous session's gains, driving gold to a record high and supporting the dollar, which continued its rise on Friday, strengthening for a third consecutive day.

Avoiding a government shutdown removes some uncertainty from the markets, which are already anxious about U.S. economic growth, largely due to Donald Trump's trade war. Just two months into his presidency, Wall Street sentiment has shifted from optimism to nervousness. The $5 trillion sell-off in U.S. stocks occurred rapidly, prompting market participants to reduce risk exposure and pushing some investors to reallocate funds into Asian markets, particularly China.

Political Standoff and Trade War Escalation

Democratic and Republican lawmakers have engaged in a high-stakes game of chicken. Democrats are demanding that the spending package include certain restrictions on Elon Musk's DOGE spending program, while Republicans are refusing and challenging the opposition party, risking being blamed for a government shutdown. However, Senate Democratic Leader Chuck Schumer backed down from his threat to block the Republican spending bill, clearing the way to prevent a U.S. government shutdown.

Another source of pressure on stock indices is the escalation of the trade war. Trump has threatened to impose a 200% tariff on European wine, champagne, and other alcoholic beverages. Later on Thursday, Trump announced that he would not lift tariffs on steel and aluminum, which came into effect this week, and reaffirmed his plans for sweeping reciprocal tariffs set to take effect on April 2.

Meanwhile, oil prices rose as the U.S. tightened sanctions, and Bitcoin rebounded on Friday after declining on Thursday.

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Technical Outlook for S&P 500

The decline in S&P 500 continues. The main challenge for buyers today will be breaking through the nearest resistance at $5,586. This would support further growth and potentially trigger a move toward the next level at $5,617.

Another key objective for bulls is to hold control above $5,645, which would further strengthen buyers' positions.

In case of a downward move due to reduced risk appetite, buyers must step in around $5,552. A break below this level could quickly push the index back to $5,520, opening the way to a further drop toward $5,483.

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