The U.S. equity market started the week with heightened volatility, driven by statements from the new Trump administration regarding the imposition of trade tariffs. Over the weekend, President Trump announced plans to impose a 25% tariff on imports from Mexico and Canada (reduced to 10% for Canadian oil) and a 10% tariff on Chinese imports. This led to a significant gap down at the opening of the main U.S. index.
However, yesterday, Trump announced a temporary suspension of tariffs on Mexico and Canada following swift negotiations, while maintaining the measures against China. This provided relief to equity markets, triggering a rebound that fully closed the previous day’s gap.
Overnight, China retaliated by announcing countermeasures against U.S. tariffs, causing the index to decline again. At the time of writing, it is trading approximately 40 points below the previous close.
Today, investors’ attention will be focused on the release of the JOLTS job openings data in the U.S., a key indicator for assessing the health of the labour market, which remains robust according to recent reports.
From a technical standpoint, the index is moving within a value area defined by low-volume nodes (LVN) at 6050 and 5909, with a central high-volume node (HVN) at 5978. The expected trading range for today is between 6055 and 5963.
Historically, Wednesday tends to be one of the strongest performing days of the week for the S&P 500.