US stocks surge on trade tariff optimism, but technicals suggest potential correction. Fed rate cut expectations decrease, dollar strengthens, and oil rallies on new tariff threats. Our market analysis provides key levels and insights.
US stock indices rallied for a second consecutive session
All the four major US stock indices (S&P 500, Nasdaq 100, Dow Jones Industrial Average & Russell 2000) rallied, reinforced by US President Trump’s softened trade tariffs stance.
He mentioned yesterday that some countries may be exempted from the planned 2 April US reciprocal tariffs, and tariffs on other goods such as automobiles, lumber, pharmaceuticals, and semiconductors might be implemented later.
In the lens of technical analysis, yesterday’s intraday rallies seen in the US stock indices reached “overstretched” conditions, increasing the odds of minor corrections. Watch the key resistance of 20,340 on the Nasdaq 100.
Federal Reserve Bank of Atlanta President Raphael Bostic said that he now sees just one interest rate cut as likely in 2025 rather than two cuts based on the latest “dot plot” projections due to sticky inflation from trade tariffs. The US dollar continued to rally supported by a rise in the 10-year US Treasury yield that surpassed above its 20-day and 200-day moving averages.
WTI crude rallied by 1.2% yesterday on the backdrop of US President Trump’s threat to impose 25% tariffs on countries that purchase oil and gas products from Venezuela, extending its gains by 6.2% from its recent 11 March low of US$65.40/barrel.
