Nasdaq 100: Tariff Relief Bounce Starting to Fade With US CPI on Tap

• Nasdaq 100 futures retreat nearly 2.5% following brief rally.
• US-China trade tensions and weak liquidity temper bullish sentiment.
• Key resistance near 19,400 caps rebound; volatility likely to persist.
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Markets are giving back some of Wednesday’s explosive gains as traders reassess what the recent US-China tariff reprieve actually means. By mid-morning London time, Nasdaq 100 futures were down about 2.5%, with global indices also in retreat.

The excitement over Trump’s 90-day delay on tariffs is wearing off, and with no lasting resolution in sight, many investors are playing it safe. While dip-buyers are still circling, this remains a headline-driven market — and the technical trend continues to flash bearish signals as long as lower highs persist. For bulls, that means staying nimble and trading level to level.

What's Driving the Weakness?

Wednesday’s surge was fuelled largely by relief — but it remains to be seen whether it was based on solid footing. The headline-grabbing delay doesn’t change the fact that a 10% blanket tariff remains, and cumulative tariffs on Chinese imports have ballooned to 125%.

With Chinese officials set to meet Thursday to consider new stimulus, markets are on edge, unsure whether more policy support will materialize or whether China will up its retaliation in this trade war.

Meanwhile, the European Union is also pausing counter-tariffs for 90 days — a positive gesture, but no guarantee that meaningful deals will follow. Complex negotiations, especially in the EU, could easily stall or falter, keeping uncertainty elevated.

It’s also worth noting that Wednesday’s rally had more to do with short-covering in thin liquidity than genuine bullish buying. While some traders may see broken resistance levels as a chance to go long, there's also a risk of renewed bond selling that could push yields higher and pressure equities again. In other words, the path ahead may be rocky.

Risk-Off Signals Flashing Again

Oil is down 3%, and the US dollar is slipping — both signs that global growth concerns, particularly around China, are eating into demand expectations. At the same time, safe-haven flows into the yen and Swiss franc are back, underlining that this isn’t exactly a confident market. Until there’s more clarity on trade and economic fundamentals, this kind of whipsaw action might become the norm.

The takeaway? The tariff drama is far from over, and markets are still trying to find their footing. Expect more volatility in the days ahead as traders navigate the noise.

Nasdaq 100 Levels to Watch

Technically, the sharp bounce off the long-term support zone near 16,450–16,770 was a constructive signal. But unless we start seeing higher highs, the bulls can’t yet claim a trend reversal.

Right now, Nasdaq 100 futures are pressing into resistance between 19,140 and 19,400 — an area of former support and where the 21-day EMA is hovering. Beyond that, the next big test lies at 20,000. A break above could open the door toward the underside of the broken trendline near 20,300, then the 200-day average at 20,400, and finally a key cap at 20,500.

On the downside, watch 18,700, today’s early low. If that breaks, 18,350 is the next pivot, followed by 17,580 — the launch point of yesterday’s bounce. A final potential safety net lies at 17,350, the reclaimed August 2024 low.

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