Despite the positive signals right after the U.S. elections in November, the first weeks of Donald Trump’s presidency don’t bring optimism to traders. Almost every market goes down, with the most popular assets at the forefront.
Tariffs, Canada, Ukraine – summary of foreign affairs
The U.S. just turned up the heat on trade tensions, slapping 25% tariffs on Canadian and Mexican imports, plus an extra 10 percentage points on Chinese goods (now 20% tariffs). Canada wasted no time hitting back with retaliatory tariffs on over $100 billion worth of U.S. products. Markets felt the impact immediately—the USD Index (USDINDEX) dropped to its lowest since November, while USD/CAD shot up even to 1.45 as the Canadian dollar took a hit.
The oil price is sinking.
Since Canada is a key oil exporter to the U.S., the tariff war is also shaking up crude oil prices. Investors are keeping a close eye on energy markets, knowing that any fluctuation could influence energy-related currencies. Brent has fallen more than 13% since Trump’s inauguration. Now at the support of $70.
Meanwhile, things are getting complicated on the geopolitical front. Trump just froze military aid to Ukraine, reportedly over a dispute with President Zelensky involving a minerals deal. This raises concerns about U.S. foreign policy and its potential impact on global stability.
With trade wars, currency swings, and global tensions escalating, expect more volatility ahead. This story is far from over.
Relationship with Russia
In recent days, there has been a slight thaw in U.S.-Russia relations. At talks in Istanbul, Russia proposed the reinstatement of direct flights to the U.S., a move seen as a step toward normalizing diplomatic ties.
This shift could impact commodity markets. As one of the world’s largest producers of oil and natural gas, Russia may increase exports, potentially affecting energy prices.
Major indexes plunges
Investors fear a tense market situation, while traders enjoy it the most. Uncertainty is not conducive to making long-term decisions, but is a driving force for movements on which some capitalize. The volatility is highlighted by the shot of the VIX, the so-called fear index. For 3 weeks it has risen by as much as 35% (also to levels not seen since August 5, 2024).
NASDAQ’s tumbling.
NASDAQ is currently 8% down from its ATH, just below the EMA200. This corresponds with reaching the 0.382 Fibo retracement, although the wick has already reached the 0.5 level.
The S&P 500 correcting.
The situation is even more interesting on the main index of America – S&P500. We are currently under the level of EMA200, which corresponds to the retracement of 0.382. The declines at the moment amount to over 5%. The level of the moving average is a place where bulls should make a move, otherwise risking the takeover by bears.
Massive falls of stocks’ value
As we wrote, the indices took a beating. We can therefore expect that their main components will also suffer – technical situations seem even more interesting.
Tesla (TSLA)
Tesla’s stock has been under considerable pressure, experiencing a decline of over 44% from its ATH on Dec 18th. Thus, not only was the entire move after Trump’s victory retraced, but the victory gap (purple rectangle) was closed precisely 4 months later.
Tesla’s freefall.
This downturn is attributed to several factors, including the implementation of new tariffs affecting the automotive industry and a notable decrease in sales, particularly in the Chinese market. Additionally, concerns about brand perception have contributed to the stock’s decline.
NVIDIA (NVDA)
NVIDIA’s stock has also faced challenges. It dropped 24% from its ATH, marking its lowest price since September. The decline is linked to reports concerning the company’s AI chips and potential competition from emerging technologies.
NVIDIA losing quarter of market cap from its ATH.
The price is currently 5% below the EMA200, a situation not seen since January 2023.
These developments underscore the dynamic nature of the stock market, highlighting the varying performances across different sectors.
Volatile crypto market
The cryptocurrency market has experienced significant volatility following President Donald Trump’s recent announcement of a proposed U.S. Strategic Crypto Reserve. In a Sunday social media post, Trump revealed that this reserve would include major cryptocurrencies such as Bitcoin (BTCUSD), Ethereum (ETHUSD), Ripple, Solana (SOLUSD), and Cardano (ADAUSD).
This announcement initially led to a surge in cryptocurrency prices. However, these gains were short-lived. By Monday afternoon, most (but not all!) were fully retraced.
BTC price action.
A yellow arrow marks an event with a reserve announced on Sunday. As you can see, the movement has been entirely retraced, although BTC is currently making up for losses again. The correction (reaching 28% at its deepest point) has significantly fallen with the wick below the 0.5 retracement, although we are currently well above the 0.382 level, making higher lows. The price is above the EMA200, the support of this bull run.
Cardano’s insane growth.
However, Cardano had truly incredible price action. After announcing its inclusion in the reserve, this altcoin grew by a dizzying 72%! However, the movement was not retraced entirely—only to the EMA200 area. Currently, the price is growing again, being above the 0.382 fib retracement of the movement lasting since Trump’s victory.
Looking at Cardano’s example, it is worth emphasizing how volatile the market is. Tweets from Trump or people from his administration can create fortunes and destroy a significant portion of them. Therefore, traders should be extremely careful when trading, especially in such conditions.
