Nasdaq 100, S&P 500 Feel the Force of Trump’s Tariffs, ASX to Open Lower

View related analysis:

The relative calm seen on Wall Street these past two weeks came to an abrupt end on Wednesday when President Trump announced that auto tariffs are set to be announced on Wednesday night. And they have just been announced. A 25% levy will be added to all auto vehicle imports not made in the US, which he expects will result in over $100 billion of annual revenue. He is also to sign an executive order to enhance auto growth in the US.

Another round of tariffs is set to be announced on April 2^nd, and that there will also be tariffs on pharmaceuticals.

Nasdaq 100 futures led Wall Street lower ahead of the official announcement, falling -1.8% by the close after hitting resistance around the November low and 38.2% Fibonacci ratio, and formed a bearish outside day.
S&P 500 futures formed a bearish engulfing day to close firmly back beneath its 38.2% Fibonacci ratio.
Dow Jones futures closed beneath its 200-day EMA after an intraday break above it, and formed a smaller bearish engulfing day just above the November low
All three indices saw higher volume on the day, which suggests bearish initiation and a potential swing high
The fact that volumes were declining through much of the rally of the past two weeks could suggest the bounce was corrective, which implies new lows

ASX 200 at a glance

The ASX 200 closed higher for a fifth day, although missed the 8,000 milestone by a single point by the end of the day
10 of its 11 sectors advanced (led by Consumer Staples and Real Estate ETFs), Healthcare was the only sector to decline
Implied volatility continues to trend lower, allowing the ASX to extend its bounce alongside Wall Street indices in light of Trump’s tariffs not being severe as once feared

ASX 200 futures (SPI 200) technical analysis

The ASX tracked Wall Street indices higher over the past two weeks, although its 3.75% gain trailed behind its US counterparts. This could suggest that the ASX has further to fall should sentiment truly sour for risk appetite.

The ASX rally stalled around a resistance cluster including the December low, 38.2% Fibonacci level and 20-da EMA. The daily RSI (2) reached the highly overbought level of 98.9 on Wednesday and now sits back beneath 50. The daily RSI (14) remains beneath 50 to show negative momentum overall.

A large bearish engulfing candle formed on the 4-hour chart before the US close. Bears could seek to fade within retracements within the engulfing candle, and using a break above Wednesday’s highs or above the 8100 handle to invalidate the bearish bias.

An initial downside target could be the swing highs and lows ~7930, a break beneath which opens up a run for 7850.

Economic events in focus (AEDT)

10:50 – Japanese Foreigner Bond and Stock Purchases
12:30 – Chinese Industrial Profits YTD
19:30 – BoE MPC Member Dhingra Speaks
23:30 – US Q4 GDP, Corporate Profits, PC Prices, Goods Trade Balance (Final), Jobless Claims

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.