March 4, 2025
Markets:
U.S. stock futures slid on Tuesday after a big sell-off on Wall Street, as President Donald Trump’s tariffs on Canada, Mexico and China took effect — leading to retaliation from some of those countries.
That action comes after a steep decline on Monday, during which the broad market S&P 500 posted its biggest daily loss since December at 1.8% down. The blue-chip Dow fell nearly 650 points, or around 1.5%. The Nasdaq Composite shed 2.6%, pushing the tech-heavy index near correction territory.
The stock market is under pressure after Trump instituted 25% duties on Canada and Mexico that took effect at midnight. Trump also slapped an additional 10% tariff on Chinese goods.
China retaliated with additional tariffs of up to 15% on some U.S. products. Canadian Prime Minister Justin Trudeau said his country would also put a 25% levy on U.S. goods.
Monday’s sell-off dragged the S&P 500 into the red for 2025. Because investors hoped that a last-minute deal could be reached to side-step the full taxes on Mexico and Canada, losses steepened in Monday’s session after Trump confirmed the long-awaited levies were coming.
Markets:
After what seemed like a strong open yesterday—and with gratitude for locking in that double in HOOD—the market quickly shifted as news broke again about tariffs and Trump’s aggressive negotiation stance. Tonight, President Trump will address the nation, outlining his plans, making the next 24 hours crucial for the short-term market outlook.
We've been pretty spot on about our technical levels, and we’re still in a bull cycle. However, a correction before the next leg higher remains possible. The 580–585 zone on SPY is critical. We’ve emphasized its importance repeatedly. A break below 580 could unravel things quickly, with 563 offering some support, but 550 is the major line in the sand. While a drop to 550 is possible, I’d rather not see it—I’m not one of those rooting for a market crash just to profit on puts. Still, the uncertainty weighing on markets is undeniable, and uncertainty is exactly what markets hate. This administration is playing hardball on trade, and that’s creating a volatile landscape.
Across all asset classes—stocks to crypto—the level of uncertainty is staggering. It feels like a blitzkrieg meant to shake the markets all at once, hopefully to clear the air quickly. If that’s the case, we could see a massive rally following tonight’s speech.
That was the bearish caution. Now, here’s the bull case: This could mark the end of selling, setting up the biggest rally yet. A red open (instead of the green-to-red reversals we’ve seen recently) is a healthier bottoming signal. If the market trades back to green before 1 PM EST, that would be a strong tell. Also, tariffs and policy shifts don’t end the AI-driven tech revolution. They may slow things down short-term, but the long-term picture remains intact—this is key for planning and adding to long-term stock positions and longer-dated options.
Despite the volatility, the market remains strong, consolidating within a wide range. Looking at the bigger time frame, we bounced perfectly off a longer-term trendline—connecting the October 2023 lows, the September 2024 lows, and now. Many traders are piling into shorts, but overnight action seemed like forced selling. Historically, that’s when the market flips the script. Could that be the play for the next 24 hours?
Stay patient. Watch the trend lines. The next 24 hours will be very telling.