In yet another striking move, US President Donald Trump has just announced plans to double tariffs on Canadian steel and aluminum, raising them from 25% to a hefty 50%. The new tariffs are slated to come into effect this Wednesday, with Trump citing Canada's intention to impose tariffs on electricity exports to the US as the catalyst for this decision. This latest escalation in trade tensions comes hot on the heels of a tumultuous Monday, which marked the worst day of 2025 for US markets. Investor fears were stoked by President Trump's aggressive tariff policies targeting America's largest trading partners, sending shockwaves through the financial landscape.
The situation has left many observers questioning the broader implications of these trade policies on both the US economy and its international relationships.
But one thing that has been quite clear all these years in this long-term bull market is that every time we have had a decent sell-off, dip-buyers have invariably stepped in and drove markets to new highs despite any macro concerns. Every single time we have heard cries of “this time it is different,” the bulls have prevailed, and bought the dip. Not even covid could hold the bulls back, let alone the unwinding of yen carry trades in 2024, or China’s sluggish recovery that caused local markets to tank last year, and before that the Russian invasion of Ukraine, or the bear market of 2022 when inflation surged and caused interest rates to shoot higher across the world (excluding Japan). Are we going to see yet another such recovery soon, or does the market want to go a little deeper before dip buyers emerge? That’s the key question, and one way to find clues is by looking at the charts.
The S&P 500 here is testing liquidity below yesterday's low of 5567 and key support in the 5550 area. With the daily RSI now well into the oversold territory, can we see a rebound here heading deeper into the US session?
By Fawad Razaqzada, market analyst with Forex.com
The situation has left many observers questioning the broader implications of these trade policies on both the US economy and its international relationships.
But one thing that has been quite clear all these years in this long-term bull market is that every time we have had a decent sell-off, dip-buyers have invariably stepped in and drove markets to new highs despite any macro concerns. Every single time we have heard cries of “this time it is different,” the bulls have prevailed, and bought the dip. Not even covid could hold the bulls back, let alone the unwinding of yen carry trades in 2024, or China’s sluggish recovery that caused local markets to tank last year, and before that the Russian invasion of Ukraine, or the bear market of 2022 when inflation surged and caused interest rates to shoot higher across the world (excluding Japan). Are we going to see yet another such recovery soon, or does the market want to go a little deeper before dip buyers emerge? That’s the key question, and one way to find clues is by looking at the charts.
The S&P 500 here is testing liquidity below yesterday's low of 5567 and key support in the 5550 area. With the daily RSI now well into the oversold territory, can we see a rebound here heading deeper into the US session?
By Fawad Razaqzada, market analyst with Forex.com
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.