- A fresh blow to Nvidia reminds us—tech and geopolitics now move hand in hand.
- Markets tried to breathe, but tariff tension snapped the calm.
- With Nasdaq stuck in no-man’s land, it’s all about playing the levels—for now.
- Looking for actionable trade ideas to navigate the current market volatility? Subscribe here to unlock access to InvestingPro’s AI-selected stock winners.
It has been another volatile session for markets, with European indices managing to turn flat to slightly firmer, and US index futures managing to claw back from earlier lows, having been rattled initially by a sharp Nvidia-led sell-off overnight. Sentiment found some mild footing after Bloomberg reported that China may be open to renewed talks — provided, of course, President Trump shows a bit more consistency and reins in his more hawkish cabinet members. Beijing is also said to want discussions to touch on Taiwan and US sanctions. Whether this diplomatic olive branch actually leads anywhere is another matter. In any case, Nasdaq’s futures remained in the red, with losses of around 1.4% at the time of writing in midday London.
Nvidia Drops 6% in Pre-Market
The latest selling overnight was driven by Nvidia, this time on the receiving end of fresh US trade restrictions targeting chip sales to China — a move that highlights the ever-worsening tensions in the global tech war. Washington unveiled new export licensing requirements for NVIDIA Corporation (NASDAQ:NVDA)’s H20 and AMD’s MI308 artificial intelligence chips destined for China, which appears to be another escalation in the US’s effort to curb Beijing’s access to advanced semiconductor tech. The market reaction was swift. Nvidia stock tumbled over 6% in after-hours trade after the company disclosed that the latest restrictions could cost it a hefty $5.5 billion.
It’s another stark reminder that geopolitics and technology remain deeply entangled — and that markets will continue to dance to Washington’s tune, whether they like it or not.
Trade Uncertainty Hangs Over Markets
Meanwhile, markets continue to suffer from the White House’s tariff flip-flopping. President Trump launched a fresh probe into critical mineral tariffs, keeping traders on their toes. The stop-start nature of US trade policy this month has made long-term positioning something of a fool’s errand, with volatility dominating the landscape.
All the uncertainty also means there is a wide range of economic outcomes, most ranging from sluggish growth and soft profits to more sobering downside scenarios. None of these scenarios are good for markets.
And still, the transatlantic trade impasse shows little sign of thawing. According to media reports, the EU and US officials made scant progress this week, with Washington making clear that most of its tariffs on the bloc aren’t going anywhere anytime soon.
After Relief Rally Trade Tensions Still Linger
The latest drop in tech shares comes after a period of calm in recent days, with global equities enjoying a notable lift, even as the trade war narrative remains largely unresolved. Still, traders have been evidently unwinding some of their more bearish positions after Trump softened his stance on certain tariffs, which had previously fanned the flames of both inflation and growth concerns. Everything changed noticeably ever since Trump decided to delay the reciprocal tariffs by 90 days. That was followed by a further de-escalation, as Washington temporarily suspended levies on key consumer tech products such as smartphones and computers. While that move bought markets some breathing space, the latest news regarding chipmakers seems to have stoked lingering trade war fears once again.
Meanwhile, on a separate yet similar front, the transatlantic trade standoff remains another sticking point. According to Bloomberg, EU and US officials made little progress in bridging their trade rift this week. American representatives made it clear that most tariffs slapped on the bloc are likely to stay in place, dampening hopes for any quick breakthrough. The US remains reluctant to scrap its 20% “reciprocal” tariffs — now temporarily halved to 10% — along with duties on cars and metals. That said, markets largely brushed this off yesterday, perhaps buoyed by the broader shift towards tariff leniency. Still, as we have found out today, investors would be wise not to get ahead of themselves. With further tariff threats hanging in the air and this being a holiday-shortened week, market momentum could well stall, leaving indices to chop sideways in consolidation.
Nasdaq 100 Technical Levels To Watch
From a chartist’s lens, the Nasdaq 100 trend isn’t outright bullish or bearish, following last week’s price action which certainly eased some of the pressure. The index is currently trading in no-man’s land after the lower end of the critical resistance band between 19,115 and 19,400 — a former support zone that flipped to resistance last week – held earlier this week. This region also aligns with a downward-sloping trendline and the 50% Fibonacci retracement drawn from February’s record high. A clean break above this area could open the door for a test of the next key hurdle — the 61.8% retracement level — near the psychologically important 20,000 mark.
However, a failure to eventually clear the above area would mean the downside pressure persisting. As such, following-up selling could see the index test 18,200 acting as the next short-term support level. Below that, you have the 18,000 mark and then 17,465 is an interesting level to watch, followed by the August 2024 low of 17,236 — a level that briefly gave way during last week’s sharp decline.
Plenty of technical landmines lie ahead, and with trade war tensions still unresolved, traders may find it hard to commit either way just yet. Thus, when it comes to trading, going from one level to the next is probably the best way to navigate the markets right now.
***
Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.