The global stock market indices are flat as investors are playing it safe after a tax announcement from US President Donald Trump sparked new fears of a trade war. The Volatility Index (VIX) that measures the fear of the investors has soared to 18.73.

Last week, President Trump announced an increase of 25% on imported steel and an increase of 10% on imported aluminum, raising concern for higher prices and possibly a trade war.

The higher cost of raw material reduces profit margins until corporations increase the sales price but the increased sales prices cut the demand. Ultimately, it’s going to hurt the profits of companies which will pay fewer dividends than they were paying before. That’s exactly the reason behind a bearish bias of investors. Take a look at key trading levels.

S&P 500 – SPX – Trading Levels

Support     Resistance

2655.06    2763.42

2621.59    2796.89

2567.41    2851.07

Key Trading Level:    2709.24

DAX – GER30 – Trading Levels

Support     Resistance

11854.45    12407.43

11683.63    12578.25

11407.14    12854.74

Key Trading Level:    12130.94