S&P 500 Daily Update for Friday February 28, 2025

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Summary of the "Daily Update" for Thursday, February 27, 2025, covering market action and the outlook for Friday, February 28:
On Thursday, the S&P 500 dropped 1.59% on above-average volume, closing at 5,889—the day’s low—after late-day selling pushed the SPX below the 100-day moving average (a prior support level) and key support at 5,900. The market opened higher (up ~0.5%) but couldn’t breach resistance at 6,000, then declined steadily, hitting pivot points such as S1 (5,923) and S2 (5,889). This erased its year-to-date gains, leaving it negative for 2025, while the Dow remains the only major index still positive. Short- and intermediate-term trends are negative—below the 20-, 50-, and now 100-day moving averages—though the long-term trend (200-day moving average) is positive.
Economic data contributed to the gloom: GDP growth was steady at 2.3%, but the deflator (inflation component) rose to 2.4% (above the expected 2.2%), signaling inflation pressures. Initial jobless claims hit 242,000 (vs. 220,000 expected), showing labor weakness, while durable goods orders beat forecasts at 3.1%. However, pending home sales fell 4.6%, far worse than the anticipated 0.8% drop. Nvidia’s strong earnings couldn’t halt an 8.5% slide, dragging semiconductors and the "Magnificent Seven" down.
The market is continuing to shift more defensive—Growth stocks (e.g., tech, discretionary) underperformed (down 2.57%) while Value stocks held up better. This mirrors late 2021–2022 patterns, driven by economic uncertainty, tariff threats (25% on Canada/Mexico, 10% more on China, starting March 4), and Fed officials signaling no rush to cut rates. The VIX spiked above 20, reflecting fear, and sentiment dropped to 18, hinting at potential overselling. The Growth-to-Value ratios weakened across large, mid, and small caps, with Staples outperforming Discretionary.
For Friday, the core PCE inflation report looms large—stronger-than-expected data could deepen the sell-off, while a softer read might spark a bounce. Seasonality favors weakness (February’s historically poor post-election), and technicals show short-term extremes (e.g., RSI, Stochastics) but no clear bottom yet. The 200-day moving average may be tested if selling persists. Long-term optimism remains, but short- and intermediate-term outlooks are bearish, with defensive posturing dominant.
Key Takeaway: Thursday’s market turned negative amid economic jitters and a Growth-to-Value shift; Friday’s PCE data will be pivotal, with downside risks outweighing upside potential in the near term.
PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/1I1V4y2ZYIYvdL3tZjD1O9-3lyNYucC-k/view?usp=sharing
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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!