Chart of the Day - US100 (02.05.2025)

The tech-heavy Nasdaq 100 index, represented by US100, exhibited mild gains on Friday following Thursday's mixed earnings results from tech giants, with futures climbing 0.5% overnight. Market sentiment improved significantly as news broke that China and the United States are opening the door towards tariff negotiations, potentially easing the escalating trade tensions between the world's two largest economies.

Tech Giants' Earnings Cast Shadow

Amazon and Apple posted better-than-expected quarterly results, but both stocks faced pressure as the companies warned of tariff impacts on future performance. Amazon surged 9% in revenue to $155.67 billion with EPS jumping 64% year-over-year, while Apple reported a 5% increase in revenue to $95.4 billion. However, both tech behemoths issued cautionary guidance regarding tariff impacts, with Apple specifically estimating a $900 million hit to costs in the coming quarter.

Tariff Concerns Weigh on Outlook

Amazon CEO Andy Jassy highlighted uncertainty around President Trump's tariff policies during the earnings call, stating it's "hard to tell where they're going to settle and when they're going to settle." The e-commerce giant's guidance for Q2 reflected this uncertainty, with operating income projections falling below Wall Street expectations. Similarly, Apple CEO Tim Cook warned of difficulties forecasting beyond June due to trade policy uncertainties, despite reporting iPhone sales above expectations at $46.8 billion.

China Signals Possible Trade Talks

Market sentiment received a significant boost after China's Commerce Ministry announced it was "evaluating" potential trade talks with the United States. This marks the first step toward potentially lowering the reciprocal tariffs that have escalated in recent weeks. The statement noted that U.S. officials had "taken the initiative to convey information to the Chinese side on a number of occasions through relevant parties, hoping to talk."

Asian Markets Rally on Trade Hopes

The positive signals regarding potential trade negotiations triggered strong performances across Asian markets, with Hong Kong's Hang Seng surging 1.7% and Taiwan's benchmark jumping 2.2%. Japanese and South Korean indexes also recorded gains of 1.1% and 0.4% respectively, reflecting improved sentiment throughout the region.

Investors now turn their attention to Friday's April jobs report, which will provide the first labor market assessment since Trump's "Liberation Day" tariffs took effect. Analysts will scrutinize the data for any signs of cooling in the labor market that might influence future policy decisions.

US100 (D1)

The Nasdaq 100, represented by US100, is trading around the 38.2% Fibonacci retracement level, a key resistance zone. Bulls will aim to retest the 200- and 100-day SMAs, while bears are likely to push for a break below 19,195—a level that previously triggered an uptrend—with a target near the 61.8% Fibonacci retracement level. The RSI is holding above the 48.5 mark, a level that has historically signaled a return to bullish momentum when breached. Meanwhile, the MACD is widening, indicating growing bullish momentum.