Not a good start to the US stock market. NASDAQ index now down 500 points

The S&P 500 traded below its 200-day moving average on both Thursday and Friday but managed to close above it on both occasions. However, today’s session opened with a gap back below this key level, which currently stands at 5735.00. The index reached a high of 5705.37 and a low of 5672.52, before bouncing modestly to 5703.00, still down 72 points (-1.29%) on the day. To relieve bearish pressure, the S&P 500 needs to reclaim and hold above the 5735.00 mark.

Meanwhile, the Nasdaq has been under heavier selling pressure, closing below its 200-day moving average (18405.00) on Tuesday, Thursday, and Friday, and extending losses further today. The index is currently trading at 17718.00, down 500 points (-2.8%). Technically, the next major support level is at 17284.34, which represents the 38.2% retracement of the rally from the November 2023 low. If selling momentum continues, this level will be a key test for buyers. Getting back above the 200 day MA is needed to turn the bias, but it is getting farther away.

Over the weekend, Pres. Trump did not rule out a U.S. recession in 2025, saying that the country is undergoing a “period of transition” due to major policy shifts.

Once again, the Fed is in the blackout period. US CPI will release on Wednesday in PPI will be released on Thursday.

This article was written by Greg Michalowski at www.forexlive.com.