Fresh Tariffs Hit Risk Sentiment
An uptick in tariff risks this week has hit risk sentiment with US stocks pulling back consequently. Trump has announced a slew of measures this week, ahead of the keenly anticipated tariff deadline on April 2nd where Trump will announce sweeping reciprocal tariffs. Stocks and the broader risk complex had been higher recently amidst reports that Trump would take a more limited approach on tariffs. However, in the wake of the actions announced this week, traders are fearful that these reports might prove unfounded, leading to a deeper weakening of risk sentiment if Trump presses ahead with more aggressive action next week.
Near-Term Volatility Risks
Fresh US tariffs on autos imports have hit key names like Tesla, with Nvidia falling also amidst fears that these actions will spark a response from China, leading to a deepening of the trade war between the two global super economies. With key tech names falling this week, the Nasdaq looks vulnerable to a fresh push lower near-term. Any rally in USD this week would amplify this dynamic. For now, the USD response has been fairly muted, seemingly linked to an uptick in US growth concerns as a result of fresh US tariffs. However, if focus starts to shift towards upside inflationary pressures, USD could start to gain ground again putting fresh pressure on US stocks.
Technical Views
Nasdaq
The index is currently sitting on support at the 19.955.14 level and with momentum studies fading quickly, risks of a break lower are seen. To the downside, 18,912.17 remains the key support to watch. Topside, 20,668.27 is the next hurdle for bulls if we turn higher again.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.