Wall Street tumbles, dollar climbs on tariff announcement

• USD jumps, EUR drop to three-week low on tariff news
• Trump announces 25% tariff on all autos not made in the USA
• Stocks end down sharply, Nvidia and Tesla both drop more than 5%
• Gold relatively quiet but mildly positive and above $3,000

FX: USD was stronger, especially in the last hour of trading after Trump’s announcement that the US will impose 25% tariffs on US auto imports. Copper levies were also mooted to be happening within weeks; previously that was seen taking months. Markets had been thinking that tariffs on industrial sectors would no longer happen. The Dollar Index ins nearing its 200-day SMA at 104.93.

EUR hit fresh three-week lows as prices closed in on the 200-day SMA at 1.0728. There was little eurozone news with markets all focused on tariff headlines. One ECB official said he does not see any reason for an April rate cut pause and would like to see rates closer to 2% sooner rather than later.

GBP slid below 1.29 with softer than expected CPI data (though services remained elevated at 5%) initially weighing on the pound. Chancellor Reeves then presented her statement with the OBR slashing 2025 GDP forecasts in half to 1%. Fiscal headroom was unchanged (£9.9bn) but still leaves very little margin for risks amid wide uncertainty. Gilt issuance was a key focus for bond markets and came in lower than expectations at £299bn. Technically, cable looks weak with 1.28 potentially next support.  

USD/JPY made back some of its losses from Tuesday. Treasury yields were higher across the board even though risk-taking was hit. BoJ Governor Ueda said the central bank must raise interest rates if persistent increases in food costs lead to broad-based inflation. Strong resistance sits around 151.50.  

AUD printed a near doji after initially selling off on weak inflation data.  USD/CAD dipped briefly below the 100-day SMA at 1.4258 but also printed a doji candle denoting indecision. Prices are sat on a major Fib level (38.2%) of the September/February rally at 1.4268.

US stocks: The S&P 500 lost 1.12% to settle at 5,712. The tech-laden Nasdaq finished down 1.83% at 19,917. The Dow closed 0.31% lower at 42,455. Tech, communication services and consumer discretionary were easily the worst performing sectors, down more than 2%. Consumer staples was the big outperformer, with defensives up over 1.4%. Nivida sunk more than 5.7% as media reports that Beijing’s energy efficiency rules could severely impact the chipmaker’s China sales as the H20 chip fails to meet environmental standards. Tesla found resistance at its 200-day SMA at $285.72 as it fell back 5.6%.

Asian stocks: Futures are in the red.APAC stocks also traded mostly positively after mixed performance on Wall Street. The ASX 200 moved north led by mining and financials after the recent budget announcement. The Nikkei 225 reclaimed the 38k level helped by a softer yen. The Hang Seng and Shanghai Comp eked out small gains but with the upside capped by ongoing tariff noise.

Gold printed an inside day with prices inside the previous day’s range. That denotes consolidation with all eyes on concrete tariff news.

Chart of the Day – Nasdaq rebound fails at the 200-day SMA

Tech momentum had picked up recently with a three-day win streak. Retail investors had been buying the dip in size similar to the last quarter even though there is a lot of tariff uncertainty and the emergence of Chinese AI start-up DeepSeek caused major volatility. But the tech-laden index turned sharply lower yesterday as reality set in amid a very tricky risk environment. Consumer confidence darkened on Tuesday with Americans’ outlook about the future dropping to the lowest level in 12 years.

Strong resistance sits at the 200-day SMA at 20,310 and just above is a major Fib level of the August/February rally at 20,393. The halfway point of that move resides below at 19,829 with the recent low at 19,152. (The index didn’t quite make its target, around 18,862, after the double top reversal pattern played out through December to March.)

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