With inflation coming out in line with expectations, the equity markets held up until Trump made his announcement. Trump and his administration want to impose tariffs of 25% and 10% on all imports of steel and aluminum. This generated strong reactions around the world, particularly in Europe and Canada. It is not yet clear which countries, if any, will be exempted from the proposed rules.
The uncertainty of a potential trade war is adding to the ‘unknown’ this weekend, with the polls in Italy and Germany already a factor. Risk aversion could therefore extend at least until next week.
Technically the SP500 has dropped below 2700 and may extend its decline to 2600.
Resistance: 2700, 2740, 2800
Support: 2620, 2612, 2590