Tariff Policies Dampen Optimism in U.S. Stock Market

Countries are engaging in tariff negotiations with the United States, leading to a softening stance from the Eurozone. While preparing retaliatory measures, they have also expressed willingness to negotiate a zero-tariff trade agreement with the U.S. This shift has brought optimism to the market, with tech stocks rebounding strongly in early trading. Tech giant NVIDIA saw an early session gain of 8%. However, by midday, the White House announced there would be no tariff exemptions in the near future, and President Trump imposed an additional 50% tariff on China. Consequently, the stock market plunged, erasing most of the week's gains.

Morgan Stanley estimates that the tariff policies will significantly impact Apple's stock price, projecting a $33 billion reduction in net income this year. Analyst Ming-Chi Kuo from TF International Securities suggests that if Apple absorbs the increased costs without raising prices, its gross margin could decrease by 8.5% to 9%. Other American companies are also likely to suffer from imported inflation. Morgan Stanley predicts a $3,800 reduction in real purchasing power for American consumers this year, increased inventory pressures, and a potential slowdown or recession in economic growth. They also anticipate that the Federal Reserve may halt interest rate cuts due to rising inflation pressures, contrasting with CME's FedWatch Tool, which predicts four rate cuts.

In March, China's Manufacturing Purchasing Managers' Index (PMI) recorded a reading of 50.5, benefiting from substantial orders from American companies and increased fiscal measures from the Two Sessions, marking a 0.3 percentage point increase from the previous value. Export orders also showed a recovery, rising by 1 percentage point to 49. In the short term, this is favorable for exports, but in the long term, China's manufacturing sector will be affected by tariff policies. Morgan Stanley estimates a 1.5 to 2 percentage point slowdown in China's GDP growth.

Gold Technical Analysis

Observing the one-hour chart, the current price is consolidating between the 2997 and 3011 range. If the price breaks out of this range, traders can follow the trend: entering a light short position if it falls below the 2997 support, or a light long position if it surpasses the 3011 resistance, with a stop loss set at 5 to 10 dollars.

Support Level: 2997

Resistance Level: 3011

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