Dow, Nasdaq, and S&P 500 Stabilize as Trump Eases Tariff Pressures

Dow, Nasdaq, and S&P 500 Stabilize as Trump Eases Tariff Pressures

The past week in U.S. stock markets delivered a cautious rebound amid rising trade tensions and a critical earnings season for Big Tech. Despite underlying geopolitical risks, optimism around selective corporate earnings and easing auto tariffs helped stabilize the broader indices.

• U.S. stock indices staged a cautious rebound as easing auto tariffs and selective Big Tech earnings helped offset escalating trade tensions.
• China rallied international opposition against U.S. tariffs, deepening geopolitical rifts and keeping risk sentiment on edge.
• Volatility retreated but remains elevated, with the VIX hovering below 29 — signaling markets are calmer but far from risk-free.

Investor sentiment is increasingly polarized: while geopolitical risks weigh on risk appetite, a handful of strong corporate earnings and easing tariff headlines are keeping hopes alive.

China Rallies Nations Against U.S. Tariff Policies

Tensions between the U.S. and China escalated further this week as Beijing launched a diplomatic campaign to counter Washington’s aggressive trade policies. With tariffs rising sharply, China is working to rally international support, warning that unchecked U.S. actions could destabilize global trade.

• Diplomatic Offensive: China rallied nations at the BRICS meeting to resist U.S. "bullying" and defend multilateral trade norms.
• Warning to Allies: Beijing cautioned countries against making deals with Washington that could undermine Chinese interests, threatening retaliatory measures.
• Tariff Escalation: 
  • U.S. tariffs on Chinese goods have surged up to 145%.
  • China imposed retaliatory tariffs, deepening trade conflict.
• Market Impact: Heightened tensions are amplifying volatility and raising concerns about prolonged global supply chain disruptions.

Trump Eases Auto Tariffs Amid Industry Backlash

Facing pressure from domestic automakers and industry groups, President Trump announced measures to mitigate the impact of auto tariffs. The administration plans to alleviate duties on foreign parts used in U.S.-manufactured vehicles and prevent tariff stacking on imported cars. This move is designed to support American workers and domestic manufacturing while addressing concerns about supply chain disruptions and rising vehicle prices

Commerce Secretary Howard Lutnick described the policy adjustment as a significant achievement, aiming to stabilize financial markets and bolster business confidence. The decision includes provisions for reimbursing prior tariffs on components like steel and aluminum

Volatility Retreating: What the VIX Signals About Market Sentiment

The VIX has been in a clear downtrend since its April spike, reflecting a shift from panic to cautious calm.

As of the latest candles, it’s hovering just below the 29 level, marking a significant cooling off from the high above 40 earlier in the month.

What This Means:

• VIX Spike (Early April): The strong bullish candles at the start of April indicate a period of heightened fear, likely driven by tariff announcements, earnings anxiety, and global uncertainty.
• Recent Decline: The consistent string of bearish candles suggests waning volatility — markets are less reactive to headline risk, and institutional flows may be stabilizing.
• Holding Near 29: Though off the highs, VIX is still well above pre-April levels. This shows traders are not fully risk-on — just less fearful compared to the peak.

US Indices Outlook

DOW

Daily

Price is sitting above equilibrium, near the upper third of the range, showing mild bullish momentum but no clean breakout yet.

4-Hour

Potential Scenarios

• Bullish Continuation: If price breaks above the recent highs cleanly (41000+), this would confirm a bullish expansion.
• Fake Breakout Trap: Price may break above the immediate resistance, attracting breakout traders, then reverse back inside the range. This would trigger a liquidity grab and invalidate weak breakout trades.
• Range Rejection & Drop: A rejection from the upper boundary (40500–41000) could bring price back down toward the range low (38000).
• Especially likely if macro sentiment turns risk-off (e.g., new tariff threats, weak earnings).

NAS

Daily

NAS continue to expand strongly and is compressing into a smaller consolidation above the macro range with a potential upside move.

Price is currently trading near 19500 level which shows signs of price holding ground.

4-Hour

Potential Scenarios

• Bullish Breakout: Clean break above the immediate resistance could trigger a continuation move toward 20,000–20,300.
• Fake Breakout / Liquidity Grab: Price may poke above the range to trap breakout buyers, then sharply reverse back below. Look for quick rejection candles if this happens.
• Failure to Break Higher: Failure to sustain above breakout or 19500 level could lead to a pullback back into the broader range, targeting 18800–18500 levels.

S&P

Daily

With correlations to NAS, S&P is also holding its ground after price broke out of the 5500 level. S&P has reclaimed the broad April consolidation range. The latest price action show a tight compression at the breakpoint level — a classic setup before breakout or reversal.

4-Hour

Potential Scenarios

• Bullish Breakout: If price break and close above the upper edge of the range at 5550, the market could surge toward 5700-5750, taking out the next key level.
• Fakeout Reversal: A push above the range followed by a rejection (fake breakout) could lead to a drop back into the April range.
• Rejection: Failure to break out at all would make a return to 5380-5450 level.

Final Thoughts

As April draws to a close, markets remain caught in a tug-of-war between geopolitical tensions, shifting tariff policies, and selective earnings optimism. While indices like the Dow and Nasdaq are attempting to stabilize, the underlying volatility compression and liquidity traps remind us that this environment rewards patience and precision — not prediction.

“In uncertain markets, clarity doesn’t come from guessing the next move — it comes from waiting for the market to confirm its intent.”

Stay adaptive, stay risk-aware — and let price, not emotion, lead your next decision.

Check Out Our Market Education

Learn how to navigate yourself in times of turmoil. Check out my market education links:

https://acy.com/en/market-news/education/how-to-identify-riskon-and-riskoff-market-sentiment-a-complete-trader’s-guide-132336/

https://acy.com/en/market-news/education/how-to-trade-risk-on-risk-off-sentiment-j-o-04112025-152146/

https://acy.com/en/market-news/education/ultimate-guide-market-trends-price-action-j-o-03252025-141804/

Want to learn how to trade like the Smart Money? Check out my new contents:

https://acy.com/en/market-news/education/smc-playbook-series-beginners-guide-j-o-04032025-155530/

https://acy.com/en/market-news/education/smc-playbook-series-part-2-spot-liquidity-pools-trading-j-o-103837/

https://acy.com/en/market-news/education/market-momentum-explained-displacement-manipulation-imbalances-smc-j-o-04152025-113853/

Follow me on LinkedIn: https://www.linkedin.com/in/jasperosita/

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.