Market navigator: week of 28 April 2025
In this special addition of Market navigator, we explore eased trade tensions between the US and China, while economic indicators signal mixed conditions ahead of critical earnings and economic data releases.
Writer | Fabien Yip | Market Analyst
Weekly market summary: US-China trade tensions ease while tech stocks lead market rebound
Last week's key market developments:
- Trade tensions ease: President Trump signalled willingness to reduce proposed 145% Chinese tariffs after meeting major retailers
- US equity rally: Nasdaq 100 gained 6.4% and S&P 500 rose 4.6%, with technology sectors leading the advance
- Crypto surge: Bitcoin jumped 12%, trading above $90,000 for the first time since March
- Currency markets: USD/JPY rebounded from seven-month lows as the US dollar strengthened 1.1% against the yen
- Global outlook: IMF downgraded global growth forecast to 2.8% from 3.3%, marking the weakest expansion since COVID
President Trump signaled willingness to reduce proposed 145% Chinese tariffs to 50-65% after meeting with retailers, contributing to last week's market rally despite Treasury Secretary Bessent cautioning a comprehensive deal could take years. Trump also clarified he won't fire Federal Reserve chair Powell, easing concerns about central bank independence. Meanwhile, the International Monetary Fund downgraded its global growth forecast to 2.8%, marking the weakest expansion since COVID and elevating the probability of a US recession to 40%.
Tech leads US market rebound while economic indicators show strain
US equity indices rallied last week amid improving trade tension narratives, with technology sectors leading the advance:
- US Tech 100: gained 6.4%
- US 500: appreciated 4.6%
- Wall Street: added 2.5%
Despite disappointing quarterly results, Tesla shares surged 18% after CEO Elon Musk announced reduced commitments to the Department of Government Efficiency (DOGE) from May onwards. Conversely, T-Mobile US plummeted 11% following subscriber acquisition figures that fell below analyst expectations.
Tariff implications are increasingly manifesting in macroeconomic indicators. The US composite purchasing managers' index (PMI) contracted to 51.2 in April, a 16-month low, signalling decelerating business activity. Concurrently, price indices surged to 13-month highs. Manufacturing sectors experienced particularly severe impacts, attributable to tariff implementation, supply chain disruptions, and currency depreciation.
The University of Michigan's latest survey indicated persistently subdued consumer sentiment and deteriorating labour market expectations, adding to concerns about the broader economic impact of ongoing trade tensions.
US Tech 100: technical analysis shows potential corrective wave formation
The US Tech 100 index breached its 20-day and 50-day simple moving average (SMA) during the recent recovery phase. Price action exhibits characteristics consistent with Elliott Wave structures, with the current advance potentially representing corrective Wave B formation.
The 0.618 Fibonacci retracement projection suggests potential upside to approximately 19,980 before bearish momentum resumes. For the current downward trend to truly reverse, the index needs to consistently stay above its 200-day SMA at 20,425. Key resistance sits at around 20,400, which will likely limit further gains unless there's meaningful improvement in global trade relations.
US Tech 100 daily chart
Bitcoin: cryptocurrency surges above $90,000 amid improved risk sentiment
Bitcoin surged 12% last week and traded above $90,000 for the first time since March. The cryptocurrency's strong performance was driven by:
- Improved risk sentiment from easing US-China trade tensions
- Growing de-dollarization concerns
- A $3.6 billion venture between Cantor Fitzgerald, SoftBank and Tether
- Significant ETF inflows
It was also reported that the cryptocurrency has finally reverted above the average acquisition cost of short-term traders, which further boosts trader confidence. After the strong recovery, Bitcoin is trading at 13% below its historic high.
Technical indicators suggest elevated valuation, evidenced by the relative strength index (RSI) exceeding the 70 threshold, traditionally signalling overbought conditions. Price action in the immediate trading sessions will prove decisive for establishing medium-term directional bias. Sustained trading above the 200-day SMA would substantiate completion of the corrective phase, potentially initiating momentum toward the $99,000 target zone. Conversely, failure to maintain price action above the SMA with subsequent retesting of support at approximately $83,000 could signal resumption of bearish market structure.
Bitcoin daily chart
USD/JPY: Technical signal emerges as pair rebounds from lows
USD/JPY rebounded from seven-month lows as the US dollar strengthened 1.1% against the Japanese yen amid moderating trade tensions. Nevertheless, concerns regarding US economic resilience continue to intensify. Simultaneously, Tokyo core inflation accelerated to 3.4%, reaching a two-year peak. Our fundamental analysis indicates continued yen appreciation potential, though the path will likely include periodic pullbacks. The Bank of Japan's (BoJ) monetary policy decision this week will be closely watched for its potential impact on currency movements.
From a technical analysis perspective, the currency pair maintains its trajectory within a descending channel below the 200-day simple moving average (SMA). However, the moving average convergence divergence (MACD) crossover potentially signals temporary USD strength, with upside potential toward 146 before the predominant downtrend reasserts itself. The recent 139.9 low provides immediate support, while significant resistance emerges at approximately 148.1.
USD/JPY daily chart
The week ahead: Critical economic data and major tech earnings
This week brings several critical economic indicators that will shape market sentiment:
- Wednesday: US gross domestic product (GDP) growth rate will provide insight into the world's largest economy's momentum before the full impact of tariffs. China's manufacturing sector performance will be evaluated through dual metrics: the official National Bureau of Statistics (NBS) Manufacturing PMI and the independent Caixin Manufacturing PMI
- Thursday: Bank of Japan interest rate decision is anticipated to maintain the current 0.5% benchmark rate, potentially influencing currency markets and global interest rate differentials
- Friday: US Non-Farm Payrolls report will be crucial for assessing labour market dynamics, potentially influencing Federal Reserve policy decisions in the coming months
Major earnings releases:
The quarterly earnings season continues with critical financial disclosures from four Magnificent Seven companies:
Other notable reports include Visa, Pfizer, and Berkshire Hathaway. Hong Kong listings feature prominent financial institutions, with HSBC and China's four major state banks scheduled to report.
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