07.03.202512:12 Forex Analysis & Reviews: US stock market takes nosedive

S&P500

Market review on March 7

Snapshot of benchmark US stock indices on Thursday

Dow Jones: -1.0%

NASDAQ: -2.6%

S&P 500: -1.8%

S&P 500: 5,738, range: 5,650 – 6,200

The stock market took another nosedive on Thursday after a brief pause on Wednesday.

As in previous sessions, the rhetoric of the White House regarding US trade policy negatively impacted the stock market.

The S&P 500 briefly fell below its 200-day moving average at 5,730, hitting a session low of 5,711 before closing just above this key technical level. However, the Nasdaq Composite (-2.6%) and Russell 2000 (-1.6%) dropped well below their respective 200-day moving averages.

Nasdaq in correction territory

The Nasdaq Composite closed on Thursday with a 10.4% plunge from its all-time high on December 16, officially putting the index in correction territory.

The S&P 500 is now 6.6% below its all-time high after Thursday's broad sell-off.

Trade policy & market reaction

The market attempted a brief recovery in the mid-morning session after Commerce Secretary Lutnick told CNBC that all goods and services compliant with USMCA would be exempt from new tariffs for one month. However, the rebound was short-lived, and the market remained in a steady downtrend by the time President Trump signed an order detailing exemptions in the afternoon.

Still, 62% of Canadian goods and 50% of Mexican goods remain subject to tariffs, with tariff exemptions set to expire on April 2.

Mega-cap & semiconductor sell-off

The sell-off in mega-cap stocks and semiconductor companies dealt a blow to the broader market, reflecting the flood of speculative trades.

NVIDIA (NVDA 110.57, -6.73, -5.7%) was a key catalyst for the decline.

Marvell Technology (MRVL 72.28, -17.86, -19.8%) issued disappointing guidance, which contributed to weakness in the semiconductor sector.

Year-to-date market performance:

Dow Jones Industrial Average: +0.1%

S&P 500: -2.4%

S&P Midcap 400: -4.9%

Nasdaq Composite: -6.4%

Russell 2000: -7.3%

Economic calendar on Thursday

• January trade balance: -$131.4 billion (consensus: -$93.5 billion)
• Weekly initial jobless claims: 221,000 (consensus: 234,000)
• Q4 productivity (revised): +1.5% (consensus: +1.2%)
• Q4 unit labor costs (revised): +2.2% (consensus: +3.0%)
• January wholesale inventories: +0.8% (consensus: +0.7%)
• February non-farm payroll report: 8:30 AM ET
• January consumer credit report: 3:00 PM ET

Previous figure revised from -$98.4 billion to -$98.1 billion.

Key takeaway: Anticipation of new tariffs led to a surge in imports, which will weigh on Q1 GDP forecasts.

Previous: 242,000

Weekly continuing jobless claims: 1.897 million

Previous revised from 1.862 million to 1.855 million

Key takeaway: The decline in initial jobless claims—a leading indicator—eases concerns about a weakening labor market.

Previous: +1.2%

Previous: +3.0%

Key takeaway: Higher productivity and lower labor costs are positive for market sentiment, as improved productivity offsets inflationary pressures.

Previous revised from -0.5% to -0.4%

Economic calendar on Friday

Energy. Brent crude is now trading at $69.50. Oil remains under pressure due to the sell-off of US stocks.

Forex news

The ECB cut interest rates by 0.25% on Thursday, March 6.

However, despite a sharp rally of EUR/USD to 1.0800 before the decision, the euro gave a muted response to the ECB rate cut.

For smart traders, this is a key signal that EUR/USD is able to maintain bullish momentum.

So, it's a good idea to keep long positions from support levels.

Conclusion:

The US stock market remains under heavy pressure, but economic data remains stable. The ISM services index for February showed stronger-than-expected growth, and weekly jobless claims remain low, signaling a strong labor market. The S&P 500 attempting to hold above its 200-day moving average is a positive sign.

Strategy: maintain buy positions from key support levels—current prices present attractive entry points for long-term investors.