After a solid week, the SPX dipped 1.57 percent on Thursday, March 31.
- On Thursday, the last hour of trade, the S&P 500 Index lost 1.2 percent.
- The last trading day of March and the first quarter was Thursday, which might have led to the late-day slump.
- Oil prices have dropped below $100.00 due to an extra oil release from the United States Strategic Petroleum Reserve.
S&P 500 fundamental forecast
Investors absorbed more statistics pointing to high inflation and President Biden’s decision to unleash a record amount of emergency oil supplies to stem increasing energy costs as the S&P 500 dipped Thursday, capping its worst quarter in two years.
All in blues
The Dow and S&P 500 fell 4.6 percent and 4.9 percent in the first quarter. The NASDAQ has dropped by 9%. This was the worst quarter for the three main averages since the commencement of the Covid-19 in the United States in the first quarter of 2020 when the S&P 500 fell 20%.
The Federal Reserve’s initiation of a rate hike cycle, rising inflation, and Russia’s invasion of Ukraine all added to stocks’ troubles this quarter.
On the other hand, March was a bit of a bright spot, with the main averages rallying for two weeks in the second part of the month. The S&P 500 and NASDAQ gained more than 3% in March, while the Dow gained 2.2 percent.
Massive energy boost
WTI futures on the New York Mercantile Exchange fell below $100.00 on Thursday after US Vice President Joe Biden announced a six-month release of one million barrels per day.
Oil prices fell more than 6% on Thursday, owing to expectations of reduced variance in the black gold’s demand-supply mechanism. President Biden has asked oil drilling firms to use their spare capacity and pump more oil to provide price stability to the oil market.
What’s happening in Ukraine?
According to Reuters, Russian President Vladimir Putin warned that payments for Russian natural gas would have to be done in rubles, aggravating Europe’s energy supply concerns.
Winners and losers
With a rise of 1.17 percent, the S&P energy index was the top sector on the plus side. In addition, it is up over 40% this year, which would be its best quarterly performance ever.
Stocks in the semiconductor and technology hardware industries were hit severely on Thursday. AMD stock dropped more than 8% after Barclays analysts cut the stock from overweight to equal weight. On the other hand, HP Inc. and Dell Inc. fell 6.5 percent and 7.6 percent.
As the yield curve tightened, bank stocks were another source of weakness, with JPMorgan Chase falling 3% and Goldman Sachs down 1.6 percent.
On the doc
On the data front, today, we have the all-important NFP. The report is expected to show that the economy created 490,000 jobs in April.
As inflation rises, so does anticipation that the Federal Reserve will raise interest rates more aggressively, putting a brake on economic development.
In addition, the uncertainty surrounding the war with Russia-Ukraine will play a large role in moving ahead.
S&P 500 technical analysis: eyeing key levels
During the end of the session, S&P 500 finished the day at 4530.42. The index closed the day with a fall of 1.57%.
The index is below its 100-day MA on the daily chart, and the RSI is pointing downwards. A break above 4600 would open the door to 4637. If it can cross that level, we’ll see the index touching 4665.
On the flip side, the next support for the index lies around 4501. If the index slips below this level, we can see a downward movement towards the 4465 level.