The S&P 500 experienced a decline due to new tariff threats from Trump, including an additional 10% on China. This pressure followed weak US Flash Services PMI data and a rise in long-term inflation expectations, reaching a 30-year high in the Final University of Michigan Consumer Sentiment survey.

Market concerns centre on how quickly the Federal Reserve can cut rates amidst ongoing inflation. The upcoming reports on non-farm payrolls and consumer price index in March are seen as critical, with benign data potentially sparking a rally while negative data could trigger a bear market.

Chart analysis indicates the S&P 500 is at a pivotal trendline, with dip-buyers aiming for a rally to new highs. Sellers hope for a breakdown past the trendline to bolster bearish positions at the 5720 level.

The 4-hour chart shows a downward trendline, with sellers poised to act on any pullbacks. Conversely, buyers are looking for upward breaks to establish new high positions. The 1-hour chart indicates a similar sentiment, with buyers seeking bounces and sellers eyeing possible breaks below key levels.

Today marks the conclusion of the week with the release of US PCE data.

Personal consumption expenditures data will be key in shaping expectations for future Federal Reserve actions. A result above forecasts could reinforce concerns over sustained inflation, leading to speculation that rate cuts may be postponed. A softer reading, on the other hand, might bolster hopes that easing monetary policy will come sooner than later. Given how closely markets are watching inflation metrics, any surprises in either direction are likely to cause a quick shift in sentiment.

With traders weighing the impact of a potential shift in US trade policy, recent tariff announcements add another layer of uncertainty. A fresh escalation in tensions between the US and China could further disrupt supply chains and raise costs, which in turn may complicate the Fed’s task of reining in inflation. Donald’s tariff move comes at a time when inflation expectations, as seen in the University of Michigan survey, have already surged to levels last witnessed decades ago. These factors combined offer little clarity on how soon policymakers will be comfortable cutting interest rates.

Looking ahead to next week, the focus shifts to labour market data. Non-farm payrolls remain one of the most widely watched releases, and a strong report could reassert concerns that inflationary pressures will persist longer than previously thought. If job figures come in weaker than expected, traders might start pricing in a looser policy stance sooner. The consumer price index report follows shortly after and will likely be another defining moment, as it directly influences Fed policy outlooks. Taken together, these reports will indicate whether the recent inflation uptick is becoming a longer-term issue or just a short-term fluctuation.

From a technical perspective, price action remains inside important levels. Both short-term and medium-term charts suggest a tug-of-war between buyers and sellers. Participants taking long positions are targeting a break beyond the trendline resistance, which could open the door to further advances. Meanwhile, those betting against the market are watching for signs of weakness, particularly a move lower that could trigger a broader downside shift around 5720.

On the shorter timeframe, sellers maintain control as long as price remains under the key descending trendline. Any rallies into resistance zones are likely to be met with further selling pressure unless buyers manage to push beyond key breakout levels. If support holds and demand reappears, a new leg higher could materialise, forcing those on the opposite side to reassess positioning.

With this week drawing to a close, attention now turns to today’s PCE release. A reading in line with recent expectations might produce a muted response, but anything that deviates from forecasts could significantly move equity markets. Given the current backdrop of inflation concerns, trade policy shifts, and upcoming employment data, volatility may persist into next week.