S&P 500 still testing 5,000Some participants in stock markets had hoped for negotiations to make some progress in the first week of April and at least some countries to be exempted quickly from the latest round of tariffs. However, now it’s a full-scale trade war: China in particular, under 104% tariffs, is very unlikely to back down. The main uncertainty for markets now is less how major countries such as China will continue to react and more whether the American government has discipline of policy to stick to what was announced.
So far there hasn’t been a full-day close below 5,000, which suggests that this area is still a support and it’d be possible to see another attempt at a bounce soon. However, it’s important to consider the bigger picture: the current retracement has barely touched the highs from late 2021 and early 2022 plus the losses in the last two months haven’t so far been bigger than in early 2022, just faster.
A very obvious bullish interpretation of the chart would be inverted head and shoulders, suggesting a return to 6,000 around this time next month. Perhaps obviously, that’s very questionable given how quickly the trade situation can change. Traders also need to monitor the upcoming earnings season in the USA, particularly banks’ reports on Friday 11 April, and sentiment on the Fed’s upcoming meetings.
This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.
