S&P 500 Forecast: SPX rises after core PCE cools

US futures

Dow future 0.45% at 43414

S&P futures 0.22% at 5877

Nasdaq futures 0.10% at 20569

In Europe

FTSE 0.50% at 8796

Dax -1% at 22449

Core PCE eased to 2.6% YoY from 2.9%
Trump trade tariffs on Mexico, Canada & China set for Monday
Nvidia extends losses after earnings this week
Oil falls for first month since November

Stocks inch higher after inflation data

US stocks are heading modestly higher, stabilizing from yesterday’s sell-off as investors weigh up core PCE data and lingering trade tariff worries.

US core PCE, the Federal Reserve's preferred measure for inflation, eased in January, offering some relief after a string of data suggesting that price pressures were heating up. Core PCE rose 0.3% MoM in line with December and eased to 2.6% annually from an upwardly revised 2.9% in December. This marks the smallest annual increase in 2021.

The data suggests some relief on the inflation front amid signs that it's reversing. The Fed has said that it wants to see a meaningful cooling in inflation before it begins raising interest rates again, particularly given the uncertainty surrounding Donald Trump's policies on inflation and the US economy.

The market is looking past the personal spending figures, which showed a 0.2% decline instead of the expected 0.1% increase. This comes after retail sales figures were significantly weaker than expected, and consumer confidence fell.

Meanwhile, the mood is cautious ahead of the weekend, with Trump’s trade tariffs on Canada, Mexico, and China set to start or ramp up on Monday. China has vowed all necessary measures against US tariffs as it faces a further 10% tariff on Monday, raising worries of escalating trade wars.

Corporate news

Nvidia is falling, extending yesterday's 8.5% decline, which saw $247 billion wiped from its market value as investors continued to weigh up Q4 earnings.

Crypto-related stocks such as Strategy, Coinbase, and Riot platforms are falling sharply, tracking the slide in Bitcoin as risk sentiment sours. Bitcoin has fallen below 80 KA, a three-month low.

Dell fell after the group predicted it would post a drop in adjusted gross margins in its fiscal 2026 year.

S&P 500 forecast – technical analysis.

After falling sharply from the 6130 record high, the S&P 500 broke below the 5915 support with a bearish engulfing candle. This combined with the RSI below 50, keeps sellers hopeful of further losses. Sellers will look to take out the 5850 low to extend losses towards 5785, the 2025 low. Any recovery would need to rise above 5915 to extend gains towards 6000, the 50 SSMA and round number.

FX markets – USD rises, EUR/USD rises

The USD is unchanged following the mixed data, holding onto modest gains. The USD is set to rise across the week, marking the first weekly rise after three weeks of losses as the USD prived to be the safe haven of choice this week.

EUR/USD is rising after German inflation rose 0.4% month on month in February after falling 0.2% in January. On an annual basis, CPI held steady at 2.3%, although the harmonised index of consumer prices rose by 0.6% MoM, more than the 0.5% expected. The ECB is still expected to cut interest rates next week.

GBP/USD is unchanged as the market failed to react to Kier Starmer’s meeting with President Trump, where the US president revived hopes of a US-UK trade deal.

Oil posts first monthly loss since November

Oil prices are falling, giving back some of yesterday's 2.5% gains. Oil is still on track to lose over 1.4% this week, marking the sixth straight weekly decline. Oil is on track for its 1st monthly drop since November as markets brace for trade tariffs and prepare for OPEC+ increased production plans from April.

The prospect of trade tariffs starting on Fridays raises concerns over the economic outlook and, therefore, the demand outlook for oil. The prospect of a slowing demand outlook comes at the same time that OPEC plus could be looking to increase its oil production quota, which had been delayed from the end of last year.

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