Wall Street Closes Lower on 25% U.S. Auto Tariff

*President Trump announced a 25% tariff on auto imports, shocking Wall Street.

*Oil prices remain on the front foot as U.S. sanctions on Venezuelan crude.

*Gold prices were poised at elevated levels as the market perceived high financial uncertainty.

Market Summary

President Donald Trump has announced a 25% tariff on auto imports, a move aimed at boosting domestic manufacturing jobs but one that has rattled financial markets, raising fears of a broader trade war. The aggressive policy shift has fueled concerns over rising inflationary pressures, reinforcing expectations that the Federal Reserve may maintain a tighter monetary stance. As a result, the U.S. dollar surged to a three-week high, benefiting from higher yield expectations.

Wall Street, however, reversed its recent rally, closing lower as risk sentiment deteriorated. The impact extended into Asian equity markets, where most indices opened in negative territory, mirroring the cautious stance among investors. The crypto market, often considered a risk-sensitive asset class, also felt the pressure, with Bitcoin edging lower and Ethereum slipping below the key $2,000 level.

In the oil market, WTI crude is inching closer to the critical $70 per barrel mark, as traders assess the impact of U.S. sanctions on Venezuelan oil exports, which could tighten global supply. However, broader economic uncertainties stemming from Trumps tariff measures raise concerns over weaker global demand for crude.

Meanwhile, gold prices remain flat, but rising geopolitical and trade uncertainties—particularly with Trumps April 2nd “Liberation Day” deadline approaching—could support safe-haven demand, keeping gold elevated.

Current rate hike bets on 7th May Fed interest rate decision:

Source: CME Fedwatch Tool

0 bps (86.4%) VS -25 bps (13.6%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index rebounded slightly, supported by better-than-expected US economic data. According to the US Census Bureau, US Durable Goods Orders increased by 0.90%, significantly outperforming market expectations of a -1.1% decline. However, long-term dollar direction remains uncertain as investors await Trumps April 2 reciprocal tariff announcement.

The Dollar Index is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 44, suggesting the index might extend its gains after breakout since the RSI rebounded sharply from oversold territory.

Resistance level: 104.55, 105.90

Support level: 103.25, 101.85

XAU/USD, H4

Gold prices found support, as investors shifted toward safe-haven assets following Trumps auto tariff announcement. Gold tested key resistance levels but remained in a consolidation range, with US trade policy developments likely to influence its next major move.

Gold prices are trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 58, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline.

Resistance level: 3030.00, 3055.00

Support level: 3005.00, 2985.00

Crude Oil, H4

Crude oil prices continued to rise, driven by bullish US inventory data. The Energy Information Administration (EIA) reported a significant drop in US crude inventories by 3.341 million barrels, far exceeding the expected 1.5-million-barrel increase. The larger-than-expected drawdown intensified supply concerns, while resilient demand further supported prices.

Oil prices are trading higher following the prior rebound from the upward trendline. MACD has illustrated diminishing bearish momentum, while RSI is at 58, suggesting the commodity might extend its gains since the RSI stays above the midline.

Resistance level: 70.30, 71.20

Support level: 69.30, 68.50