The S&P 500 index is trading lower, dragged down by steep losses in financial stocks after the Fed announced Friday that it was pulling the plug on SLR exemptions for banks.
The financial sector index on the S&P 500 is presently down by 1.31% or 7.53 points as of the time of writing, as the Fed’s decision not to extend the Supplementary Leverage Ratio (SLR) exemption has shaken up several banking and financial stocks listed on the S&P 500 index. The measure, which was introduced in 2020 to enable banks to retain extra liquidity to ride out the COVID-19 storm, is set to expire on March 31.
As of the time of writing, the S&P 500 was trading flat, having been down as much as 40 points in the first hour of trading on Friday.
S&P 500 Technical Outlook
The index appears to have found support at the lows of 11/12 March at 3910.5, after a bounce from the intraday low at 3886. However, the index remains under pressure after 10-year bond yields surged on the Fed’s announcement, and this puts 3910.5 at risk. A breakdown opens the door towards 3870.0, with 3823.9 and 3765.1 lining up as potential downside targets.
On the other hand, the index needs a strong push from the bulls to transcend 3950.4, which opens the door towards the current all-time high at 3974.1. Restoration of the uptrend requires the formation of a higher high above this level, which brings in 4005.9 into the picture as a potential new target.
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S&P 500 Daily Chart
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