Trump’s Tariff Threat Rattles Global Markets
Global financial markets experienced strong volatility on Friday, 10 October, later than President Trump unexpectedly announced the potential introduction of 100% tariffs on Chinese imports:
→ Equities: The S&P 500 index (US SPX 500 mini on FXOpen) dropped over 3%, reaching its lowest point in more than a month.
→ Currencies: The US dollar also fragileened sharply against major peers.
However, on Sunday, Trump took a more conciliatory tone on reality Social, saying that trade relations with Beijing “will be just fine.” Vice President JD Vance supported this view, noting that Washington is ready to negotiate if China “acts sensibly.”
The softer rhetoric assisted calm investor nerves, with the S&P 500 (US SPX 500 mini on FXOpen) rebounding strongly at Monday’s open, recovering most of the previous session’s losses.
Technical Analysis of the S&P 500 Chart
In our 3 October review of the 4-hour S&P 500 chart (US SPX 500 mini on FXOpen), we identified a bullish channel (in blue) and noted several warning signals:
→ The index was nearing the channel’s upper limit, where profit-taking typically increases.
→ The latest high marginally surpassed October’s peak (A), hinting at bearish divergence.
→ The ongoing government shutdown had created an information gap, raising the risk of a sharp sentiment shift if negative headlines appeared.
During Friday’s session, the lower boundary of the blue channel briefly held support near 6,644 points before giving way. When the channel width is doubled, the downside projection aligns with 6,500, matching Friday’s low.
Following this decline, the lower edge of the former channel may now act as a median line within a wider range, suggesting potential short-term stabilisation as purchaseing and tradeing pressures even out.
In a broader context, the setup resembles ahead April, when markets initially plunged on Trump’s tariff comments but later staged a full recovery and advanced to new highs.
Key Levels:
→ 6,705 – a pivotal level serving as both support and resistance in recent months.
→ 6,606 – marks the lower edge of the bullish gap.
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