S&P 500’s attempt to rebound looks weak amid negative macroeconomic landscape

A heated atmosphere in the Middle East sent the S&P 500 Index (SPX) lower in late February. Traders are now hastily rotating their investments into safe havens, fearing a protracted crisis in the region that could lead to global supply disruptions. The last straw that threw market participants into a panic and active profit-taking was the sudden spike in oil quotes and the latest US Producer Price Index (PPI) report.

Escalating tensions at the heart of crude production have poisoned the entire system, putting a ban on ships passing through the Strait of Hormuz. As a result, oil prices have recently surged by more than 4%, with local highs jumping to $82 per barrel. Elevated energy costs mean additional expenses for businesses and households, sluggish demand, and lower corporate earnings.

Simultaneously, the latest PPI data release revealed a 0.5% month-on-month acceleration in cost growth, which exceeded economists' expectations and marked the highest level in three and a half years. Given this report, the US Federal Reserve (Fed) is unlikely to cut rates before June or July. Tight monetary conditions, in tandem with an economic slowdown, create an unfavorable environment for the stock market.

During today’s early hours, SPX attempted to rebound after its recent fall. The price formed a bullish candlestick near the 6,800 level, a zone defended by buyers. However, it keeps trading below the middle Bollinger Band (6,885)—a dynamic resistance—while hovering closer to the lower line at 6,773. The Stochastic Oscillator remains in neutral territory (%K=47, %D=54), with no clear direction in view. On the flip side, fundamental factors aren’t in favor of the S&P 500, so the current recovery is likely to be a small distraction on the way down.

Take a look at the following trading strategy:

Sell SPX during the rebound, with Take profit at 6,730 and Stop loss at 6,900.

This forecast is valid between March 2 and March 9, 2026.