S&P 500 futures fell 1.2% to 5,296 points
this week, though the decline may not reflect a significant shift given the
heightened volatility currently gripping the markets. The index failed to
breach resistance between 5,310 and 5,410 points, effectively stalling its path
to more ambitious upside targets in the 5,750–5,850 range.
President Donald Trump’s announcement of a
90-day tariff truce—excluding China—was met with a tepid response from Beijing.
Even the sharp reduction of tariffs on Chinese electronics imports from 145% to
20% was countered by China’s non-tariff retaliation, notably a ban on Boeing
aircraft for domestic airline fleets. Washington’s response, a threat to impose
245% tariffs on Chinese imports, lacked conviction. Nonetheless, China has signalled
a willingness to engage in dialogue—provided the U.S. demonstrates a measure of
respect. With Trump already scaling back on tariff aggression, it may be time
for both sides to begin serious negotiations.
On the corporate front, the U.S. banking sector
delivered a solid start to the Q1 2025 earnings season. Netflix added to the
optimism, posting quarterly results that beat analysts’ estimates on both
revenue and profit. Shares rose 3.5% in premarket trading, climbing to $1,006.
However, the broader market has yet to fully absorb these positive results. If
geopolitical developments remain calm over the long Easter weekend, equities
could rebound on Monday, with optimism potentially extending until Tesla’s Q1
report on Tuesday.
Investor sentiment remains mixed. Last week,
the SPDR S&P 500 ETF Trust (SPY) recorded $19.3 billion in net inflows—down
from $23.2 billion (excluding Friday). This week, however, the fund saw $5.9
billion in net outflows, possibly due to profit-taking amid concerns that trade
tensions with China may persist.
The technical outlook for the S&P 500
remains cautiously optimistic. Near-term targets are set between 5,310 and
5,410 points. A decisive break above this range could trigger a rally toward
5,750–5,850. Key support is located at 5,220–5,240. However, this bullish
scenario depends heavily on diplomatic progress, particularly the prospect of a
meeting between Presidents Trump and Xi Jinping.
In energy markets, Brent crude dipped below
the key $68–70 per barrel support, reaching as low as $60 before rebounding to
$67.96. Persistent recession fears are weighing on oil prices, though progress
in trade negotiations could lift crude above the $70 threshold, targeting
$74–75. Still, OPEC+ production increases may cap gains.
Gold soared to a fresh record high of $3,358
per troy ounce this week on continued safe-haven demand. However, elevated
levels could prompt profit-taking. Immediate support lies between $3,250 and
$3,280, while resistance sits at $3,350–3,380. If the rally loses steam, a
technical correction toward $3,000 remains a possibility.
The U.S. Dollar is showing signs of
stabilisation after weeks of pressure. The recent pause in U.S. Treasury
sell-offs offered some respite for the Greenback, particularly during Asian
trading hours. If the trade war truce holds over the coming weeks, the EURUSD
may be poised for a sharp reversal. Downside targets for the pair are projected
between 1.0500 and 1.0600.