The US stock market has experienced volatility, with the NASDAQ Composite down 5.7% on Thursday after a historic rally the previous day, where it rose 12.16%. This fluctuation follows President Trump pausing tariffs on over 70 trading partners, although 10% tariffs still apply globally, along with increased tariffs on China.
Analysts foresee potential price increases and a 1% rise in US prices due to current tariffs. Expectations suggest a 90% decline in US-China trade, potentially reducing GDP by 0.35%. Goldman Sachs previously estimated a 65% recession probability but adjusted it to 45% after the tariff pause.
Tariff Impacts
Tariff impacts extend to companies like Amazon and the film industry, with Amazon cancelling billions in orders and fewer US films being approved for import by China. The NASDAQ’s fluctuation indicates continued market uncertainty, with new support levels emerging at 14,500 and 17,500.
The recent NASDAQ swing—with a remarkable 12% rise one day followed by a sharp pullback of nearly 6% the next—points to a market caught between optimism and caution. The root of this movement, at least in part, came from President Trump’s announcement to temporarily freeze tariffs on a wide group of trade partners. While that move gave traders initial hope, the lingering global 10% baseline tariffs and further increases on China plainly kept broader sentiment from stabilising.
Goldman Sachs’ shift in recession risk—from two-thirds likelihood down to less than half—speaks volumes. Their revision reflects a collective sigh of relief after the White House decision, but it’s still far from a clean bill of health. From our standpoint, the numbers speak clearly. A severe hit to trade with China—expected to fall by 90%—will not just affect bilateral flows; it will echo across supply chains that stretch well beyond those two economies. When we factor this into GDP forecasts, the probable contraction, modest as it may be at 0.35%, still pushes us to reconsider growth expectations for the next two quarters.
More practically, we’re watching companies reposition rapidly. Amazon offering a hard example: swiftly slashing billions in purchase orders. For a firm known for massive logistics and procurement engines, this isn’t symbolic—it’s protective action. Meanwhile, the entertainment sector is also taking a hit, but not from domestic pressures. China’s reduced clearance of American films tightens another link in cross-border commerce, this time cultural, but profitable all the same.
Market Behaviour
Market behaviour has begun revealing new price buffers as consequences become clearer. Based on recent moves, technical support zones around 14,500 and 17,500 on the NASDAQ hint where buyers begin stepping back in. For those of us navigating the derivatives side, what matters now is how these support levels interact with broader macro signals in the next fortnight. We’ll be watching for confirmation—through volume and volatility measures—as to whether these floors hold quickly or fade under weightier global forces.
Sentiment is twitchy. The move from optimism to caution is happening over the course of single trading days—not weeks. These aren’t routine swings but measured reactions to geopolitical policy. Until we see consistency from the policy front, especially regarding trade enforcement and potential retaliation from overseas partners, we expect elevated hedging activity.
We don’t need perfect clarity. What we’re aiming for is stability long enough to place meaningful risk. Traders would rightly eye implied volatility here, particularly midway through earnings season, as a gauge of how much uncertainty is being priced in. Neutral strategies may not capture the edge needed; directional trades will demand tighter entry and exit points. The zone near 14,500 may attract protective put flows, while the upper boundary at 17,500 could offer short-call opportunities unless broken with force.
Behind these numbers are real contract shifts, real pivots in position sizing, and a set of macro factors that don’t show signs of vanishing overnight. For those of us monitoring movement and momentum, the next few weeks may present rare chances—so long as we’re disciplined in entry and remain quick on the triggers that matter most.
