- When tariffs talk, markets listen—sometimes with panic.
- But with 20,000 acting as Nasdaq’s line in the sand, the next move could be decisive.
- Is this just another trade war tremor, or the start of something bigger?
- Looking for more actionable trade ideas to navigate the current market volatility? Subscribe here to unlock access to ProPicks AI winners.
With trade war tensions dominating headlines, markets remain on edge. Yesterday’s bombshell from Trump sent U.S. stocks lower, with European auto stocks following suit. This morning, major indices stayed under pressure, and U.S. carmakers slipped in premarket trading—General Motors (NYSE:GM) dropped 6%, while Tesla (NASDAQ:TSLA) edged higher. However, by mid-morning in London, both U.S. futures and European markets attempted a recovery.
Whether this bounce gains traction depends largely on Trump. If he softens his stance, markets could breathe a sigh of relief. Otherwise, with April 2’s “liberation day” looming, it’s hard to see how stocks can shake off trade war concerns.
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It Is All About Trade War
Trump signed an order on Wednesday imposing a 25% tariff on auto imports, further intensifying a trade war aimed at bolstering domestic manufacturing. The decision paves the way for additional tariff measures next week, including the introduction of so-called reciprocal tariffs on 2nd April—an escalation likely to strain relations with key trading partners.
Trump suggested further tariffs would be imposed on the European Union and Canada if they worked together “to do economic harm” to the US. But the US president hinted he might ease some China tariffs—but only if Beijing plays ball in pushing TikTok’s US operations into American hands. A classic case of deal-making, or just more trade war turbulence? Either way, markets remain on edge.
European stocks took a sharp dive today after former US President Donald Trump doubled down on tariffs targeting automakers, stoking fresh fears over the economic fallout. The move sent jitters through trading floors, with investors already wary of the potential drag on global growth. It was a brutal session for European auto giants, with Porsche and Mercedes-Benz Group among the hardest hit—facing a staggering €3.4 billion blow from the fresh US import levies, according to Bloomberg.
Nasdaq 100 Technical Analysis and Trade Ideas
From a technical point of view, the markets remain vulnerable despite index futures bouncing off their lows. Yesterday’s sharp sell-off saw several major global indices, including the German DAX, break important support levels. US indices also broke a few short-term support levels, which has raised the possibility of markets now resuming their downward move that began in February, following a decent bounce in the last couple of weeks.
Looking at the Nasdaq 100 Futures daily chart, well it has found some support from the area around 20,000 which is a significant level to watch. Not only is this a prior support and resistance level, but it also marks the long-term bullish trend line that was broken earlier this month, before being reclaimed. In addition, this area corresponds with the low prior to the big rally we saw post-election. It is therefore a massive psychological zone. What happens here could set the tone for the next few days at least.
Trade Ideas
If we see the index break this level decisively, then that could see markets drop to the next support seen around 19735. Below that is last Friday’s low of 19602, putting stops that are undoubtedly resting below that hammer candle at risk. This month’s earlier support zone of 19200-19400 would be the next focal area below that level.
In terms of resistance levels to watch, 20143 is a key zone, marking last week’s high when the Nasdaq 100 formed an inside bar formation on the weekly time frame, ending a run of 4 consecutive weekly losses. But if we can’t stay above last week’s high, then the market may well go in search of liquidity below last week’s low (19550).
However, if the bulls manage to hold on to that 20,000 support level and the bullish trend line, despite these latest trade war developments, then that would be a sign that the market wants to go higher. In that case, we could well see another re-test of the 200-day average.
In a Nutshell
So, in short, 20,000 is pivotal: a decisive break below it is bearish, while if it holds today then that would be a positive sign.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.