President Trump has liberated Mr. Market, and the beast looks keen to blast through a key technical level on the S&P 500 (^GSPC).
In a “Liberation Day” spectacle at the White House, Trump uncorked a baseline tariff rate of 10% on countries that will go into effect on April 5.
Additional tariffs will be added for some countries that the administration considers to be the worst trade offenders.
Some of those countries are important sourcing and business regions for many large US companies such as Apple (AAPL), Nike (NKE), and Walmart (WMT). China, for example, will see an estimated tariff rate of 54%. Vietnam clocks in at 46%. Japan is at 24%.
Read more: What Trump’s tariffs mean for the economy and your wallet
“This was a negative shock for markets,” one source told me by text.
Markets don’t like to be shocked, and they are reminding investors of that very truth.
As of this writing, the Dow Jones Industrial Average (^DJI) is down more than 1,000 points premarket. The S&P 500 is down by 3%, similar to the Nasdaq Composite (^IXIC). Market leaders in Apple and Nvidia (NVDA) are down 7% and 6%, respectively premarket.
As of 11:42:04 AM EDT. Market Open.
^GSPC ^DJI ^IXIC
But market goers are specifically locked in on the S&P 500 as a gauge of post-tariff sentiment, particularly the index’s March 13 closing low of 5,527.50.
At this moment, the S&P 500 is poised to open at 5,538. A breakthrough below the March lows intraday coupled with a new closing low could really damage sentiment further, pros warn.
Read more about today’s market action in response to Trump’s tariffs.
“We confess that we were feeling better about the ability of the S&P 500 to defend its mid-March low coming into Wednesday, only to have that glimmer of optimism dissipate again on Wednesday evening,” RBC Capital Markets strategist Lori Calvasina wrote in a note early Thursday.
“Like most analysts and strategists, we’ll be digesting the implications of the newly announced reciprocal tariffs in the coming days,” Calvasina wrote. “For now, we reiterate our view that if the S&P 500 breaks meaningfully below the mid-March 2025 low, we think it’s likely the index will fall into the 4,900-5,300 range for a ‘growth scare’ drawdown of 14-20% from the February 2025 peak, similar to the growth scare drawdowns of 2010, 2011, 2015-2016, and 2018.”
Others on the Street agree with Calvasina but contend a sharp move lower may set the table for a short-term bottom in stocks. All the sellers would be cashed out, said BTIG technical strategist Jonathan Krinsky.
