Stock Market Faces Key Test as Bulls Struggle Against 200-Day Moving Average

Nasdaq and S&P 500 Lead Losses as Market Sell-Off Intensifies

U.S. stocks tumbled on Monday, with selling pressure accelerating through the morning session as investors braced for a critical week of economic data. Market concerns have deepened over the health of the U.S. economy, particularly as inflation fears resurface amid President Trump's unpredictable trade policies.

The Dow Jones Industrial Average (DJI) fell approximately 1.1%, while the S&P 500 (GSPC) sank over 2%, following its worst week since September. The Nasdaq Composite (IXIC) led the decline, plummeting more than 3.4%, with the "Magnificent Seven" tech stocks experiencing sharp losses.

March's market turbulence has been exacerbated by increasing economic uncertainty. Worries about slowing growth have been compounded by ongoing trade negotiations between the U.S., Mexico, and Canada, with tariffs and retaliatory measures creating additional market volatility. Speaking on Fox News on Sunday, President Trump addressed concerns about a potential recession, stating that the economy is undergoing "a period of transition."

Adding to the geopolitical uncertainty, Mark Carney has been elected as Canada's new Prime Minister following his leadership win within the Liberal Party. Carney has signaled a tough stance on trade negotiations, raising the potential for prolonged disputes between the U.S. and its northern trading partner.

Key Economic Data to Shape Market Sentiment

Investors are preparing for a data-heavy week that could drive further market volatility. The Consumer Price Index (CPI) for February, set for release on Wednesday, will provide crucial insight into inflation trends, while the Producer Price Index (PPI) follows on Thursday. Both reports will help shape expectations around Federal Reserve policy and potential interest rate decisions.

Additional reports that could impact market sentiment include the Federal Reserve’s survey of consumer inflation expectations, released Monday, and the University of Michigan’s consumer sentiment report, scheduled for Friday.

While corporate earnings season is winding down, some notable reports remain. Oracle (ORCL) is set to announce earnings on Monday, followed by Adobe (ADBE) on Wednesday.

Bitcoin Struggles Below $80,000 Amid Broader Market Weakness

The broader market sell-off has also impacted cryptocurrency markets. Bitcoin (BTC-USD) dipped below the $80,000 threshold on Monday as risk-off sentiment intensified across global financial markets. Despite positive developments last week, including a strategic reserve announcement and a White House crypto summit, Bitcoin failed to sustain upward momentum. Over the past 24 hours, Bitcoin has declined by more than 4%, reflecting broader investor concerns about economic instability and slowing growth.

Goldman Sachs Slashes U.S. Economic Forecasts as Tariff Impacts Deepen

Major Wall Street firms are adjusting their economic outlooks as the consequences of President Trump’s trade policies become increasingly evident.

In a Monday research note, Goldman Sachs Chief Economist Jan Hatzius downgraded the firm's 2025 GDP growth forecast from 2.4% to 1.7%, citing growing risks from U.S. trade policy. Additionally, the firm raised its projection for the Federal Reserve's preferred inflation gauge to 3%, up from previous estimates in the mid-2% range.

"The reason for the downgrade is that our trade policy assumptions have become considerably more adverse," Hatzius stated, marking the first time in over two years that Goldman Sachs has forecasted U.S. GDP growth below Bloomberg consensus estimates, which currently call for growth above 2%.

Conclusion: A Market at a Crossroads

With stocks under pressure, critical economic data ahead, and trade policy uncertainties escalating, investors are navigating an increasingly complex landscape. Market bulls are struggling to defend key technical levels, and the outcome of this week’s economic reports could determine whether recent losses extend further or if a stabilization effort emerges.

As volatility remains elevated, all eyes will be on Wednesday’s CPI report and Friday’s consumer sentiment data for clues on whether inflation is rebounding and how the Federal Reserve may respond in the months ahead. Meanwhile, geopolitical risks and trade tensions could continue to drive uncertainty in global markets.