The Nasdaq 100 index retreated 0.5% to 20,824 points on Tuesday, cooling after Monday’s explosive 4.4% rally as investors awaited key inflation data and reassessed the US-China trade truce.
Trade Truce Optimism Fades After Monday’s Rally
Investors adopted a more cautious stance toward the 90-day tariff reduction agreement that slashes US duties on Chinese imports to 30% from 145%, and Chinese tariffs on US goods to 10% from 125%. While representing substantial progress, concerns remain about the lack of detail and potential for future volatility.
April’s Consumer Price Index (CPI) will be released today, offering the first look at how Trump’s tariffs have impacted inflation. The reading is expected to show sticky price pressures and could significantly influence Fed rate decisions.
Recession Outlook Improves as Markets Reset Expectations
Goldman Sachs cut its recession forecast to 35% from 45%, while prediction markets show recession odds falling to 40% from 52% last week. The Fed rate cut timeline has also shifted, with the first reduction now anticipated in September rather than July.
Asian markets showed varied reactions, with Japan’s Nikkei jumping 1.6% while Hong Kong’s Hang Seng fell 1.5% on technology selling.
US100 (D1)
The Nasdaq 100, represented by the US100, is currently trading around the 23.6% Fibonacci retracement level — a key zone that may act as resistance. Bulls will look to retest previous highs, while bears may aim for a pullback toward the 200- and 100-day SMAs, with the 38.2% retracement level as the next potential downside target.
The RSI is in bullish divergence and nearing overbought territory, suggesting momentum remains supportive of the uptrend but warrants caution. Meanwhile, the MACD continues to widen after a bullish crossover, indicating sustained bullish momentum. Source: xStation
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