Nasdaq Composite futures slide to five-week low after new U.S. tariff threats

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Nasdaq Composite drops to five-week low

Highlights

Nasdaq futures drop over 400 points amid U.S.–EU trade escalation
Technical breakdown below 20 and 50 EMA confirms short-term bearish trend shift
EU prepares €93B response as markets digest risk from retaliatory tariff plans

President Trump announced 10% tariffs on imports from eight European countries and warned these levies could be lifted to 25% by June. The announcement follows growing tension between the U.S. and several NATO-aligned European governments after Denmark rejected a proposal to sell Greenland. European nations affected include France, Germany, the UK, the Netherlands and others. Analysts estimate Greenland’s potential resource value at between $500 billion and $700 billion, raising the stakes of the dispute.

Nasdaq Composite price chart (Dec 2025 -Jan 2026). Source: Tradingview

European Union leaders are preparing a €93 billion counter-tariff package in response. France is reportedly advocating for the activation of the EU’s anti-coercion instrument, a legislative tool that allows punitive economic retaliation. The standoff between two of the world’s largest economic blocs is now adding another layer of uncertainty to equity markets already digesting shifting central bank expectations.

Nasdaq breaks below 20 and 50 EMA as RSI drops to 2026 low

Technically, the Nasdaq Composite futures chart has shown notable deterioration. Price action has broken beneath the 20-day EMA at 23,500 and the 50-day EMA at 23,270, confirming a near-term bearish shift. The daily RSI has dropped to 42, the lowest reading in 2026, reflecting weakening momentum and increasing vulnerability to further losses.

Short-term technical indicators point to deepening pressure. On the 4-hour chart, the 20 EMA has crossed beneath both the 50 and 100 EMA, forming a bearish alignment that signals a trend shift to short-term weakness. The 4-hour RSI has plunged toward the 30 threshold, a sign that price is approaching oversold territory but not yet at a reversal point.

Nasdaq may extend losses toward 23,000 if bearish momentum accelerates

If bearish momentum deepens, Nasdaq futures could slide further toward 23,100, exposing 23,000 as the next key support level. This zone may come under pressure if risk appetite weakens further or if the European Union moves ahead with its proposed retaliatory tariffs in response to the U.S. trade measures.

On the upside, any recovery attempt will need to overcome resistance at the broken 50-day EMA near 23,450. Regaining this level is essential to challenge the current downtrend and reestablish upward bias. Until that threshold is cleared, upside moves are likely to be limited and vulnerable to renewed selling.

In recent analysis, we discussed how the Nasdaq Composite rose 180 points premarket as bulls defended the 100 EMA support. The rebound followed President Trump’s statement easing concerns over Fed leadership, which restored confidence across tech stocks.

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