Salesforce stock has tumbled below a crucial ascending trendline, marking a notable shift in its market trajectory. The trendline, which commenced in December 2022, had previously been breached on multiple occasions on the daily chart but remained intact on the weekly chart until now. On Thursday, Salesforce's shares fell by more than 4%, positioning it as the Dow Jones Industrial Average's (DJIA) worst performer. This decline contributed to the DJIA's drop below the 41,000 support level for the first time since last September, closing the day with a 1.3% decrease. Meanwhile, the S&P 500 also experienced a downturn, falling over 10% below its all-time high, signaling the index's first significant correction since 2023.
Salesforce Stock's Critical Support Levels
Salesforce's stock price plummeted to $270.90 during Thursday's session, a decline of 4.8%. The stock has repeatedly dipped below the ascending trendline on the daily chart, raising concerns among investors. The primary support range for Salesforce stock lies between $225 and $242, a zone derived from mid-2023 resistance and mid-2024 support levels. This range is now being closely monitored by market analysts to determine whether it can provide a stabilizing effect for the stock in the coming sessions.
The Relative Strength Index (RSI) for Salesforce stock indicates a downward trend but has not yet reached oversold territory. This suggests that further downward pressure could be expected, causing unease among investors who are assessing their positions in the tech giant.
Impact of Global Trade Tensions
The broader market sentiment has been significantly affected by the ongoing global trade war initiated by the Trump administration. This geopolitical tension has led to increased volatility in equity markets, prompting many investors to reconsider their allocations in U.S. equities. As a result, Salesforce and other technology stocks have faced heightened scrutiny and selling pressure.
The potential for a recession looms on the horizon, with the Atlanta Fed's GDPNow indicator forecasting a 2.4% annualized decline in U.S. GDP for the first quarter on a seasonally-adjusted basis. A recession could lead to reduced corporate spending on enterprise software solutions, impacting companies like Salesforce. Additionally, retaliatory tariffs imposed by foreign governments in response to U.S. tariffs could further hinder U.S. software sales abroad.
Broader Market Corrections and Investor Sentiment
The DJIA's decline below the 41,000 support level and the S&P 500's significant correction highlight the prevailing investor anxiety surrounding economic and political uncertainties. The S&P 500's fall marks its first proper correction since 2023, raising questions about future market resilience.
Investors are closely monitoring developments as they seek clarity on the potential implications of global trade policies and their impact on corporate earnings. Market participants are weighing these considerations alongside macroeconomic indicators in an effort to navigate the current turbulent environment.