Friday is already shaping up to be a news-driven session. Reports are hitting the wires that China is preparing to launch $75 billion in retaliatory tariffs, further escalating a “hot” trade war. U.S. stocks haven’t fared well since the news broke, with the DJIA DOW (-125), S&P 500 SPX (-17), and NASDAQ (-65) falling through the first half-hour of trade.

In addition to the fresh round of tariffs, Jerome Powell is due to speak at the Jackson Hole Symposium minutes from now. While not expected to move markets, his speech will address global economic concerns. One would think that the U.S./China trade war will be a hot topic; if Powell goes into detail on tariff escalation, we may be in for more turbulence facing U.S. stocks later today.

U.S. Stocks Fall As China Announces New Tariffs

The past 36 hours have been a challenge for U.S. stocks as traders have attempted to price in the purposefully-vague FOMC Minutes release from Wednesday. At this point, the markets are convinced that more FED rate cuts are on the way ― is this good news for stocks, or a signal of pending economic doom?

Until the closing bell, here are two levels to watch for the September E-mini S&Ps:

• Resistance(1): Bollinger MP, 2921.75
• Resistance(2): Daily SMA, 2935.75

Overview: At this point, U.S. stocks are trending south on the trade war flare-up. For the September E-mini S&Ps, the technical outlook is not good. Prices are pushing session lows, well below the Bollinger MP and Daily SMA. It is very early, but this has the look of a nasty Friday for equities bulls. 

If you are going to take fresh longs in the indices, doing so with tight stops and limited leverage is a good idea.