US500 plunges 10%. Can the Fed stop the bleeding?

• Recession & inflation fears – Driven by Trump’s tariffs
   
• Fed decision, key rates likely unchanged; focus on FOMC outlook
   
• Volatility Ahead, US500 may swing 1.4% post-Fed decision

Did you know that the US 500 is down almost 6% this month and is on track for its worst trading quarter since Q3 of 2022.
 

The US500 has seen an over 10% decline since reaching all-time highs in February 19, 2025.

fuelled mostly by fears of recession and inflation - an effect of President trumps tariff policies - investors will be looking for a reprieve when the Fed chair Jerome Powell takes to the stage following the Federal Reserves interest rate decision 30 minute earlier.

Note that the Fed is expected to keep rates the same, hence, investors and traders will turn their attention to the FOMC Projections and FOMC statements.

The latest Dot Plot from December 2024 saw a 50 basis points reduction in2025
 

The US500 index is forecasted to move as much as 1.4% higher OR lower in the 6 hours after the Fed rate decision.

From a technical standpoint, the US500 is clearly facing significant selling pressure and is not oversold (at the time of writing).

For those anticipating a decline in the index, it's essential to keep an eye on these key support levels:

• 5,523.2 – The 261.8 Fibonacci level
   
• 5,392.1 – A significant price level
   
• 5,135.1 – The 423.6 Fibonacci level

On the flip side, bullish traders and investors should focus on the following resistance levels, which are critical for upward movement:

• 5,670.0 – A significant price level and psychological round number level
   

• 5,763.1 – The 161.8 golden Fibonacci level which coincide the 200 simple day moving average
   
• 5,809.2 – The 21-day simple moving average

The Fibonacci level is taken from February 3rd swing low of 5,911.4  to February 19th all time swing high at 6,151.3.