Forex Analysis & Reviews: 02.05.2025 - US stock market on May 2:...

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InstaForex Loprais Team - Official participant of the Dakar rally

02.05.2025 01:33 PM

US stock market on May 2: S&P 500 and Nasdaq still battling volatility

US stock indices ended the previous regular session higher. The S&P 500 rose 0.63%, while the Nasdaq 100 gained 0.52%. The Dow Jones Industrial Average edged up by 0.21%.

The US equity market remains highly volatile, unlike Asian indices, which have shown more stability, climbing today to their highest level in over a month. Futures on US stock indices also advanced on Friday after China announced its readiness to resume trade negotiations with the United States, boosting optimism over easing tariff tensions.

The statement, which followed reports of a phone call between senior trade officials from both countries, renewed hopes for the resumption of constructive dialogue and a potential de-escalation of trade disputes that have weighed heavily on the global economy in recent months. Investors welcomed the news as a signal of easing tensions and renewed growth momentum.

The trade war between the US and China continues to have far-reaching effects across sectors, from agriculture to technology. Tariffs have driven up costs, disrupted supply chains, and fueled market uncertainty. As a result, any sign of progress toward resolution is met with enthusiasm. Regardless of which side takes the initiative, this is viewed as a positive step.

The S&P 500 has now posted gains for eight consecutive sessions, marking its longest winning streak since August of last year. The rally reflects growing optimism that trade tensions may ease following President Donald Trump's April 2 announcement of the steepest tariffs in a century.

However, market sentiment will face a major test today as investors shift their attention to the US jobs report, set for release later in the session. This will be the final key data point of the week, following disappointing earnings from Apple Inc. and Amazon Inc.

Adding to the news cycle, reports emerged yesterday that Donald Trump asked Congress to consider a significant reduction in funding for domestic agencies while increasing defense spending. These proposals could form the basis of the federal budget plan for 2026.

Apple shares dropped 3.8% on Thursday after the company reported a larger-than-expected decline in sales in China last quarter, overshadowing otherwise strong results. Meanwhile, Amazon's forecast fell short of expectations, dragging its shares down 3.2% in after-hours trading. In contrast, shares of Microsoft Corp. and Meta Platforms Inc. surged following upbeat earnings reports. Nvidia Corp. also rallied after reports that the United States is considering easing restrictions on chip sales to the United Arab Emirates.

As for the technical outlook on the S&P 500, the key task for buyers today will be to overcome near-term resistance at $5,660. A break above this level could unlock further upside toward $5,680. Another crucial target for bulls is maintaining control above $5,705, which would reinforce upside momentum. If risk appetite wanes and the market heads lower, buyers will need to defend the $5,630 level. A break below it could send the index down to $5,608, with further downside potential toward $5,586.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.