Stock Market Outlook for Mon Feb 3 2025 – Lower Close Over Tariff Worries

Prior Trading Day Summary:

On Friday Jan 31, stocks ended the day lower in an afternoon tumble that saw the SPX fell from 6112 shortly after 1:00 PM to 6031 before closing at 6040. The tumble was over news of impending tariffs being implemented by the Trump administration against Canada, Mexico and China. Over the weekend all 3 countries announced their intentions to retaliated with their own tariffs. Futures ahead of Monday’s opening shows a large drop to start the day on Monday but we could see that improve before the open. Tariffs will take time to work their way into the economy and while they sound threatening to the economic outlook, at present the proposed tariffs are being implemented against only a small part of each countries economy. Nonetheless the worries that the tariffs could escalate among trading partners has investors worried.

On Friday the SPX closed down 30 pints to 6040 on 4.9 billion shares traded which was the second highest volume of the past 3 weeks.

The NASDAQ closed down a mild 54 points to 19,627 but on 8.3 billion shares traded which was the second highest volume for the week with only Monday’s 9 billion shares, surpassing it. 64% of all stocks on the NASDAQ were falling on Friday.

Over the weekend futures showed a steady decline for the start of the first week of February as investors worry about potential negative effects tariffs could bring.

Let’s review the technical indicators at the close on Fri Jan 31 2025 to see what to expect for the first trading day of February 2025.

Stock Market Outlook: SPX Closing Chart For Fri Jan 31 2025

The index closed above the 50 and 21 day moving averages. This is bullish.

The closing candlestick is signaling that sellers took charge on Friday and there could be more selling on Monday. There is a shadow on Friday’s candlestick which signals a potential dip lower to start the first week of February.

The 21 day moving average is rising and closed at 5974 but it is still trading below the 50 day which is bearish. The 21 day might cross above the 50 day early this week. That would be a strong up signal.

The 50 day moving average is rising and closed unchanged at 5990 which is bullish.

The 100 day moving average is rising and closed at 5864 which is bullish.

The 200 day moving average is rising and closed at 5636 which is bullish.

The Lower Bollinger Band is starting to rise which is neutral at present. The Upper Bollinger Band is rising which is bullish.

For Monday the SPX chart is more bullish than bearish aside from the closing candlestick on Friday which is signaling a lower close is possible for Monday.

SPX Stock Market Outlook review of Fri Jan 31 2025

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Mon Feb 3 2025 

For Monday the open will be lower unless investors decide that the tariffs at present are only affecting a small portion of the economies of all countries involved. If investors regain confidence the index could open lower but then move higher into the morning.

The day could end slightly higher but the likelihood of a lower close is greater as investors try to come to grasp with an event that no one can judge which direction it may take the economies.

Despite the uncertainty, stocks remain in a strong bull market with the majority of companies who have reported earnings to date, having beaten estimates. Even if Monday ends lower, Tuesday could see a rebound.

Potential Economic and Political Market Moving Events

Monday:

9:45 S&P final manufacturing PMI for 2024 is estimated at 50.1

10:00 Construction spend is estimated to rise to 0.3% from 0.0% prior

10:00 ISM manufacturing is estimated to rise slightly to 50.0% from 49.3% prior.

Intraday: Autosales are released intraday and are expected to come in above 16.9 million