S&P 500 price extends sharp selloff as trade war escalates and technicals confirm deeper pullback
S&P 500 nears 5,000 as rising tariffs and technical signals deepen investor concerns
U.S. equity futures tumbled Wednesday, with the S&P 500 Index losing over 1% and approaching a one-year low, following a sharp retaliatory move by China that raised tariffs on U.S. goods to 84%. This escalation follows the Biden administration’s recent cumulative 104% levy on Chinese imports and signals a hardening stance in what has become a full-blown trade war between the world’s two largest economies.
The Dow and Nasdaq 100 futures also slid 1% and 0.7%, respectively, as investors reacted to fears of prolonged global economic disruption. Beijing’s addition of American firms to its export control list further eroded hopes for a near-term resolution. Meanwhile, corporations across sectors came under pressure—Delta Airlines cut its guidance citing recession risks, AbbVie fell amid tariff threats on pharmaceuticals, and Walmart slipped 1% after signaling cost-cutting measures in response to higher input prices.
S&P 500 price dynamics (Dec 2024 - April 2025) Source: TradingView.
Technical breakdown points to sustained weakness
From a technical perspective, the S&P 500 has sharply broken below key support zones. The index breached the lower boundary of a rising wedge and collapsed under its 5,600 support, losing nearly 5% in five sessions. The drop pushed price action below all major EMAs (20, 50, 100, and 200), which were previously clustered between 5,360 and 5,774.
Momentum indicators add to the bearish outlook. The 4-hour MACD remains deep in negative territory, with histogram bars showing no signs of bullish divergence. Meanwhile, RSI plunged to 16.61, signaling a deeply oversold condition that may spark a short-term bounce—but the broader structure remains fragile. Volume patterns confirm institutional selling near the 5,800–5,900 zone, suggesting further downside may be ahead.
Outlook hinges on reclaiming key levels
Unless bulls reclaim the 5,360–5,600 zone with strong volume, analysts warn of further losses, with technical support near 4,800 now in focus. Traders will closely watch for upcoming inflation data and further developments in U.S.-China trade relations to gauge next steps.
As covered in previous sessions, the S&P 500 was already showing technical weakness at the wedge resistance zone near 5,750. Today’s breakdown confirms the trend shift we highlighted earlier, reinforcing the need for caution amid macroeconomic headwinds.
