CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
empty
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

25.02.202513:59 Forex Analysis & Reviews: US stock market escapes from narrow range

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Markets follow a natural cycle: trends give way to consolidations, and consolidations lead to new trends.

Before the sell-off on February 23–24, the S&P 500 had gone 35 consecutive trading sessions without a 1% decline, marking its longest streak since December. This has happened only three times in 2024. Since the November presidential election, the broad stock index had been stuck in a tight 4% trading range—the narrowest since 2017. A breakout was inevitable, and bulls fled the battlefield.

S&P 500's performance

Exchange Rates 25.02.2025 analysis

The market was falling ahead of NVIDIA's earnings report, despite expectations that the company's earnings would exceed forecasts. Strong economic data, corporate earnings which are twice higher than Wall Street estimates, and even a bullish shift from Morgan Stanley—all failed to support US stocks.

Even Morgan Stanley, which was previously bearish, now claims that the US stock market's underperformance compared to Europe and other regions won't last long. The S&P 500, they argue, remains the highest-quality index with the best profit potential.

According to Principal Asset Management, since 1965, 10%+ corrections in the S&P 500 have primarily been caused by either a hawkish Federal Reserve's policy shift, or prolonged high interest rates. Something similar is happening now, as derivatives markets don't expect rate cuts before June. However, the situation differs significantly—no one is even hinting at a hard landing.

S&P 500 and European stock index performance

Exchange Rates 25.02.2025 analysis

The key drivers of the S&P 500 pullback include Donald Trump's confirmation that tariffs on Mexico and Canada will proceed as planned; the victory of Germany's Christian Democratic Union (CDU) in parliamentary elections; and investors' belief in an imminent resolution of the conflict in Ukraine. For a long time, the S&P 500 rallied as markets grew indifferent to Trump's tariff threats, which could slow the US economy.

However, the clock is ticking:

March 1: 25% tariffs on Mexico and Canada could take effect.

March 12: Steel and aluminum duties—to which the EU has promised retaliation.

April 1: Reciprocal tariffs with China are set to roll out.

Meanwhile, 10% duties on Chinese imports remain in place.

The CDU's victory under Friedrich Merz sent European stock indices, led by the DAX 40, soaring. This accelerated capital outflows from the US to Europe, reinforcing the narrative of waning US market dominance and diminished faith in American tech giants.

Exchange Rates 25.02.2025 analysis

Technical outlook for S&P 500

On the daily chart, the S&P 500 continues to form an expanding wedge reversal pattern. For confirmation, the index needs to break below 5,925. Once this occurs, a short-term rebound is expected, providing an opportunity to increase short positions from 6,083.

Marek Petkovich
Analytical expert of InstaForex
© 2007-2025

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.
Widget callback

Turn "Do Not Track" off

 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of Instant Trading EU Ltd including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.