- Technology tariff pause boosts market sentiment, but uncertainties and potential volatility remain.
- Dow Jones and S&P 500 technical analysis highlights key support and resistance levels to watch.
- RSI indicator is approaching crucial level for monitoring potential shifts in market momentum.
Technology stocks surged, boosting Asian and European shares on Monday, after President Trump excluded smartphones and computers from China tariffs. This gave markets a breather after a week of sharp ups and downs.
Wall Street Indexes look set to follow suit with gains expected for major tech giants. There was still uncertainty as President Trump said on Sunday that tariffs on semiconductors would be announced within a week, and a decision on phones would come “soon.”
Having finished last week on a positive note, market participants will be hoping for further gains this week. There are however, a host of risks to consider and markets are by no means out of the woods just yet. Expect further volatility as the tariff picture continues to develop.
On Friday last week, the fear and greed index was around the 13 mark which leaves it in extreme fear territory despite the positive end to the week. This should not come as a surprise as the recent US equity market sell-off ranks among the most severe short-term declines since 1929.
Source: IsabelNet, Haver Analytics, Goldman Sachs Global Investment Research
Monday will be a quiet day in terms of data, but tariff announcements or updates may move the needle for US indices. There is also a host of Federal Reserve policymakers on the docket later in the day which could add further uncertainty for market participants to navigate.
Technical Analysis – Dow Jones and S&P 500
Dow Jones (US30) Daily Chart, April 14, 2025
Source: TradingView (click to enlarge)
From a technical standpoint, the Dow Jones finished last week with a gain of around 5.22% and gapped higher over the weekend.
The gap higher down to the developments over the weekend regarding technology equipment being exempt from tariffs, for the time being.
The 14-period RSI on a daily timeframe may be a good indicator to keep an eye on. The RSI is currently approaching the 50 neutral level with a rejection likely to lead to fresh lows and a sign that momentum remains in favor of bears. A break above the 50 mark may be seen as a sign of a shift in momentum and could embolden bulls.
Should bulls prevail, markets will be eyeing 41095 and 41400 before the 41950 handle comes into focus.
A bearish push from here may find support at the psychological 40000 mark before 39588 and 39000 come into focus.
Support
- 40000
- 39588
- 39000
Resistance
- 41095
- 41400
- 41950
S&P 500
Looking at the S&P 500 and the chart almost mirrors the Dow Jones.
I will also be paying close attention to the period-14 RSI on a daily timeframe to monitor any potential momentum shifts.
A break higher does face some crucial levels with the 5500 handle also hosting the 20-day MA before markets eye 5538 and 5635.
A push lower for the S&P 500 and markets will look for potential support at 5391, 5330 and 5267 respectively.
For both indexes tariff developments and overall sentiment hold the keys. Any moves will largely depend on how this develops over the course of the day and week ahead.
S&P 500 Daily Chart, April 14, 2025
Source: TradingView (click to enlarge)
Support
- 5391
- 5330
- 5267
Resistance
- 5500
- 5538
- 5635
