China Answers with 25% Tariff on US Goods – How It Impacts the US SPX and DJIA?

Global stock markets are under bearish attack, especially the US stock indices. The SPX and DJIA are extending their losses over the trade war sentiment. China raised tariffs up to 25% on American goods in response to the trade tariff from the US.

Why is the Tariff Making Stock Indices Bearish?

The 25% tariff is likely to increase the cost of goods sold, thus making it expensive for customers. This can kick back as:

The consumer can lower its demand for a particular product which may cause a drop in sales and profits of a company. We invest in stock markets to earn dividends, and if companies are making smaller profits, they will distribute smaller dividends.

Being an investor, I would rather look for other opportunities of making money. Thus, investors start selling the Stock indices on sentiment while investing in Gold and other haven assets.

S&P500 – SPX- Trading Levels

Support     Resistance

2605.02      2667.46

2585.74      2686.74

2554.52      2717.96

Key Trading Level:    2636.24

DJIA – Dow30 – Trading Levels

Support     Resistance

23804.3      24367.74

23630.25    24541.79

23348.53    24823.51

Key Trading Level:    24086.02

Investors are highly advised to monitor the US non-farm payroll figures on Friday as it can be a trendsetter for the upcoming weeks. Good luck!