Nasdaq 100 Forecast: QQQ falls further as the US applies trade tariffs

US futures

Dow future 0.25% at 43000

S&P futures -0.65% at 5809

Nasdaq futures -0.65% at 20296

In Europe

FTSE -0.95% at 8788

Dax  -2.85% at 22480

• Trump applies 25% tariffs to Mexico & Canada, 10% more to China
• China retaliates with trade tariffs of up to 15% on US imports
• Concerns over the US economic outlook rise
• Oil drops as OPEC+ look to raise production

Stocks slump amid rising growth concerns

US stocks are set to open lower as investors avoid riskier assets after President Trump presses ahead with trade tariffs on its neighbours and China, raising concerns over the economic outlook.

Stocks are extending the sell-off from yesterday, when the S&P 500 saw its biggest one-day drop since mid-December and the Nasdaq closed 9% down from its all-time high. The US imposed 25% tariffs on imports from Mexico and Canada and doubled levies on Chinese goods to 20%. Meanwhile, China retaliated with additional tariffs on its US imports.

Investors fear that the trade tariffs will put pressure on the US economy, which is already starting to show early signs of weakness. Recent forward-looking data has shown that business and consumer confidence have fallen sharply amid concerns surrounding Trump’s policies, which could lead to an economic downturn. Businesses are holding back on investments and expenditures, waiting for more clarity on Trump's policies, and households are consuming less.

Meanwhile, the Federal Reserve is now expected to deliver three 25 basis point rate cuts by December, up from 2, as investors price in slowing growth.

The US economic calendar is quiet today; however, New York Fed President John Williams will comment later in the day, and his speech will be scrutinised for clues about the central bank's stance on monetary policy.

Meanwhile tomorrow sees economic data releases ramp up with ISM services PMI data and ADP payroll figures ahead of Friday's nonfarm payroll.

Corporate news

Target is set to open 1.8% lower after the big box retailer revealed a cautious outlook for sales growth in its current financial year and highlighted the uncertainty surrounding Trump's trade policy.

Best Buy fell 1% despite posting a surprise increase in quarterly comparable sales for the all-important holiday shopping season. Customers took advantage of promotions to snap up electrical appliances and gaming consoles.

Tesla is set to reopen almost 4% lower after data showed the EV maker's sales or its China-made EVs fell 49.2% in February compared to a year earlier, to 30,688 cars, marking its lowest level since August 2022.

Taiwan's semiconductor manufacturing rose 0.6% after the chip manufacturer revealed a fresh $100 billion investment in the US.

Nasdaq 100 forecast – technical analysis.

The Nasdaq has extended its decline from the 22,245 record high reached February 18, falling below its 50 SMA and is testing support of the 200 SMA at 20,300. Sellers supported by the RSI below 50 will look to break below here, opening the door to the 20k support zone. Should the 200 SMA hold, buyers will need to rise back above 20,750 to open the door to 21k.

FX markets – USD falls, EUR/USD rises

The USD is falling after gains last week as I'm all right beat mood in the market drive safe haven outflows.

EUR/USD has jumped above 1.05 to a multi-month high on USD weakness and despite worries that Europe could be next in line for similar tariffs. Eurozone unemployment remained unchanged at 6.2%. This is unlikely to impact the ECB rate decision on Thursday.

USD/JPY is falling to fresh multi-month lows amid USD weakness. The yen benefits from safe-haven demand and optimism of further rate hikes from the BoJ.

Oil drops as OPEC+ is set to increase output from April

Oil prices are falling for a third straight day as the marker braces for the impact of Trump’s trade tariffs and on expectations that OPEC+ will press ahead with production increases from April.

OPEC+ decided on Monday to proceed with a planned April oil output increase of 138,000 barrels per day, marking the first increase in output since 2022.

Meanwhile, tariffs on Mexico, Canada, and China are likely to weigh on economic activity and energy demand, adding downward pressure to oil prices.

Finally, Trump's halt of military aid to Ukraine and the growing distance between the White House and Ukraine could see the US ease sanctions on Russia sooner, which would bring more oil supply to the market.