The S&P 500 pulled back to test the 4300 level on Friday amid a broad stock market decline fueled by risk aversion.
- Concerns about the Ukraine conflict and a possible nuclear accident overshadowed a bullish US jobs report.
The S&P 500 fell back to test the 4,300 level on Thursday and last traded down 1.0% in the 4,320 area after bouncing before hitting weekly lows around 4,280. The drop reflected a broad decline in major US indices, with the Dow trailing last, shedding 0.7% and the Nasdaq 100 falling 1.2%, as investors remained concerned about the escalation of the Russo-Ukrainian war. and the increase in prices of raw materials. Despite a sharp drop in US bond yields amid intense demand for safe haven assets, the tech/growth stock-heavy Nasdaq 100 index fell to new weekly lows, breaking convincingly below the 14,000 level once again. Bearish techs can see this negative ending to the week as opening the door for a return to previous monthly lows just above 13,000.
A bullish US jobs report failed to lift the spirits of US stocks, which remained focused on developments in Ukraine, where any meaningful ceasefire remains a distant prospect. Had it not been for the overshadowing of events in Ukraine, stronger-than-expected job gains (indicative of strong economic growth) coupled with a surprise drop in wage growth (less pressure on the Fed to tighten) could have supported stock market confidence. Instead, markets remained focused on events in Ukraine and fears are mounting about another risk posed by the conflict, that of the fighting causing an accident at one of Ukraine’s many nuclear plants.
In the week ahead, US stocks are likely to continue trading choppy and unpredictable. “The market is confused,” said a SoFi analyst, adding that “even on days when we have decent rallies in the market, the VIX hasn’t really dipped below 30 and that’s pretty high.” “What that tells me is that the market can’t decide which way to go,” they said, adding that “there are a lot of conflicting factors and market participants are trying to weigh which ones are going to be the most important right now.”
Additional technical levels
Source: Fx Street
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