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04.03.2025 10:59 AM
Stock Market on March 4th: S&P 500 and NASDAQ Continue to Decline

Yesterday, U.S. stock index futures plunged, extending the bearish movement. During today's Asian trading session, S&P 500 futures rose only 0.1%, while the tech-heavy NASDAQ added 0.2%.

The stock sell-off spread to Asia after President Donald Trump pledged to impose tariffs on trade partners, raising the spectre of a trade war that could hurt global economic growth. The yield on U.S. Treasury bonds fell to its lowest level in more than four months.

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Investors panicked, offloading assets sensitive to global trade and shifting toward safer havens such as gold. Concerns over an impending trade war overshadowed positive corporate earnings reports and economic data that had fueled the recent stock market rally.

The escalation of trade disputes could significantly disrupt global supply chains, reduce corporate profitability, and stifle investment. Economies heavily dependent on exports appear particularly vulnerable. As fears of a trade war deepen, central banks may also face pressure to raise interest rates, further weakening already sluggish economic growth across different regions.

Asian stocks fell to a one-month low after the S&P 500 experienced its steepest sell-off this year. Yesterday, the U.S. president announced that Mexico and Canada failed to negotiate a delay in the tariffs set to take effect today. Trump also signed an order doubling tariffs on China to 20%. Oil fell to its lowest level in three months, and an index of the 100 largest digital tokens dropped.

Markets had hoped for more room for negotiation, potential extensions, or further discussions, but these expectations were not met, triggering another wave of sell-offs.

Trump also stated that new tariffs on Canada and Mexico would take effect on Tuesday, dealing a blow to the U.S.'s two largest trading partners and highlighting his commitment to reshaping global trade. The long-promised tariffs are poised to become some of the most significant under Trump's administration, covering approximately $1.5 trillion in annual imports.

Additionally, Trump announced on Monday that the U.S. would impose tariffs on foreign agricultural products starting April 2, adding another layer of trade barriers on imported goods. He did not specify which products would be affected or whether any exceptions would be made.

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At the close of trading yesterday, the S&P 500 index dropped 1.8%, while the NASDAQ index fell 3.1%. The Canadian dollar and the Mexican peso weakened. The cryptocurrency market also saw significant asset sell-offs. In commodities, oil continued its decline to near a three-month low as OPEC+ confirmed plans to resume previously halted production. Gold stabilized after gains the previous day.

Regarding the technical outlook for the S&P 500, the decline persists. The key objective for buyers today is to break through the nearest resistance at $5,877, which would support continued growth and open the way for a move to $5,897. An equally important task for bulls will be maintaining control over $5,915, strengthening their positions. If the market moves downward amid declining risk appetite, buyers must assert themselves around $5,854. A break below this level would quickly push the instrument back to $5,833 and open the way toward $5,813.

Jakub Novak,
Analytical expert of InstaForex
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