Technology Tariff Pause Brings Market Relief, but Uncertainty Remains
As a result of President Trump’s announcement, technology stocks experienced a significant surge, with the Asian and European markets benefiting from the reprieve. The technology sector, which has been experiencing a tough time lately, witnessed a remarkable turnaround. The relief felt by investors has been palpable, with many markets ending the week on a positive note. However, despite this reprieve, there are still several risks that need to be taken into consideration, and it is by no means clear that the market is out of the woods. The uncertainty surrounding the tariffs on semiconductors and phones continues to cast a shadow over the market. President Trump has stated that he will make a decision on tariffs on semiconductors within the next week, and a decision on phones is expected to be made soon. This lack of clarity on the tariff front has resulted in significant volatility in the markets, and it is unlikely that the market will see a sustained period of calm until further notice. In addition to the tariff uncertainty, the US equity market sell-off has been the worst short-term decline since 1929. The fear and greed index was around 13 last week, indicating that the market is currently in extreme fear territory, despite the recent positive end to the week. This should not have come as a surprise, given the severity of the recent market downturn. Market participants will be hoping for further gains this week, but they will also be taking into account the various risks that are present. Monday will be a relatively quiet day in terms of data, but there is still the possibility of tariff announcements or updates that could move the needle for US indices. Furthermore, there are several Federal Reserve policymakers who will be on the docket later in the day, which could add further uncertainty for market participants. Technical Analysis – Dow Jones and S&P 500
The Dow Jones finished last week with a gain of around 5.22% and gapped higher over the weekend due to the developments over the weekend regarding technology equipment being exempt from tariffs, for the time being. The Dow Jones technical analysis chart is available on TradingView (click to enlarge). The Dow Jones chart shows a gap higher down to the developments over the weekend, with the 14-period RSI currently approaching the 50 neutral level. The RSI is a widely used indicator in technical analysis that measures the strength of a stock’s recent price action. A break above the 50 mark may be seen as a sign of a shift in momentum and could embolden bulls. If bulls prevail, markets will be eyeing 41095 and 41400 before the 41950 handle comes into focus. A bearish push from here may find support at the psychological 40000 mark before 39588 and 39000 come into focus. A break above 41950 could be a key level to watch for, as it could indicate a shift in momentum and a move towards higher prices. The S&P 500 technical analysis chart is almost mirrored to the Dow Jones, with the same critical levels to watch. The S&P 500 is also approaching the 50 neutral level on its 14-period RSI, and a break above this level could be a sign of a shift in momentum. However, a break below the 5500 handle, which is hosted by the 20-day MA, could indicate a shift in momentum and a move towards lower prices. The support levels for the S&P 500 are 5391, 5330, and 5267, which could provide a floor for the market if it were to experience a downturn. These levels are critical to watch for, as they could provide a level of support for the market if it were to experience a downturn. The uncertainty surrounding the tariffs on semiconductors and phones continues to cast a shadow over the market, and it is by no means clear that the market is out of the woods. Despite the reprieve, there are still several risks that need to be taken into consideration, and it is unlikely that the market will see a sustained period of calm until further notice. In conclusion, while the technology tariff pause has brought relief to the market, it is by no means a guarantee of calmness in the markets. Market participants will need to be vigilant and continue to monitor the situation closely, as the uncertainty surrounding the tariffs continues to cast a shadow over the market. It is not clear when the market will reach a turning point, and it is unlikely that the market will see a sustained period of calm until further notice. Ultimately, the fate of the market will depend on the actions of President Trump and the Federal Reserve, and it is by no means clear that the market is out of the woods yet. Therefore, market participants should be prepared for further volatility and uncertainty, and should continue to monitor the situation closely. The market is always subject to surprises, and it is by no means clear what the future holds. The decision of President Trump will have a significant impact on the market, and it is by no means clear that the market is out of the woods yet. The future of the market is uncertain, and it is by no means clear what the future holds. The market is subject to surprises, and the uncertainty surrounding the tariffs continues to cast a shadow over the market. Technical Analysis

S&P 500

The Dow Jones and S&P 500 technical analysis charts are available on TradingView (click to enlarge).

“We will make a decision on tariffs on semiconductors within the next week, and a decision on phones is expected to be made soon.” – President Trump

The technology tariff pause has brought relief to the market, but it is by no means a guarantee of calmness in the markets. The decision of President Trump will have a significant impact on the mark
Definitions
*

*

*

Highlight
The technology tariff pause has brought relief to the market, but it is by no means a guarantee of calmness in the markets.