S&P 500 and Nasdaq 100 Plunge at Finish of Turbulent Quarter, March NFP Eyed

U.S. EQUITY OUTLOOK:

  • The S&P 500, Dow Jones and Nasdaq 100 fall on Thursday, but end the month with top-notch characteristics
  • On a quarterly basis, all three indices suffer heavy losses
  • In this article, we look at the important technical ranges to observe within the Dow and Nasdaq 100

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US stocks fell on the last day of the primary quarter and month, falling for the second consecutive session due to unfavorable rebalancing flows and a sense of caution after the Federal Reserve’s most popular inflation measure reached its best level since 1983.

When all was mentioned and realized, the S&P 500 fell 1.57% to 4,530, while the Dow fell 1.56% to 24,678. The Nasdaq 100, for its part, plunged 1.55% to 14,838, falling slightly below its 200-day level of easy lag. The three indices closed the month of March with good characteristics, but posted their worst quarterly performance since the 1st quarter of 2020, after the January and February sell-off triggered by rising interest rates, geopolitical tensions, rising inflation and the cooling of financial markets.

Specializing in Thursday’s buying and selling bias, the temperament was barely pessimistic after the March core PCE jumped to five.4% y/y, its highest degree in almost 40 years. While the expansion of inflationary forces is a priority, the information did not initially elicit much reaction from the market, as a sharp decline in oil helped calm some nerves. For example, WTI and Brent plunged more than 3% after the White House announced that it would launch one million barrels of crude per day for the next six months from the country’s strategic oil reserve to spice up sales and reduce costs.

Moving forward, all eyes may be on Friday’s U.S. nonfarm payrolls report. Consensus expectations recommend that the U.S. financial system created 490,000 jobs in March and that unemployment costs fell by one-tenth of a percentage point to three.7%, the lowest degree in more than two years.

While an excellent jobs report will reinforce the need to aggressively withdraw accommodative hedging in the coming months, it may further allay concerns that the financial system is heading for a recession. Recently, the steady flattening of the yield curve and the prospect of an inversion in the 2010s have increased the risk of a financial slowdown in the not too distant future, which has led traders to become a little more defensive. In any case, we will know more tomorrow, but one factor is obvious: if the employment picture remains healthy, customer spending is likely to remain sustained, which is a tailwind for the company’s profits and therefore the inventory market.

TECHNICAL ANALYSIS OF THE DOW JONES

After failing to erase the resistance of the clusters ranging from 35,210 to 35,300, the Dow began to retreat towards a key ground in the 34,652 space. If sellers lead the blue-chip index under this assistance in the coming periods, worth may very well be on its strategy to check the 200-day easy shifting common, adopted by 34,095. On the other hand, if consumers come back and push the index higher, the resistance seems to be at 35,210/35,300, but a rise above this ceiling could open the best way for a transfer in the direction of the February index close to 35,825.

Dow Jones Chart ready in TradingView

TECHNICAL ANALYSIS OF THE NASDAQ 100

After losing its 200-day easy shifting common, the Nasdaq 100 accelerated its decline and crashed below the Fibonacci index at 14,901. If the bears retain market management in the coming periods, the tension could intensify, triggering a larger sell-off and exposing the 14,456 field.

On the upside, if consumers resurface and trigger a bullish reversal, the preliminary resistance appears at 14,901, adopted by 15,145, the SMA at 200 days. If the Nasdaq 100 breaks through these obstacles, the bulls could storm to 15,345, the Fibonacci retracement of 61.8% of the November 2021/March 2022 decline.

Nasdaq 100 (NDX) Chart ready in TradingView UK

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—— Written by Diego Coleman, contributor

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