Nasdaq Composite slips 0.4% on tariff shock
Nasdaq slides 0.4%
The Nasdaq Composite index began the week on the back foot as investors reacted to fresh tariff announcements from President Trump.
On Monday, Trump revealed sweeping tariffs against seven countries, including Japan, South Korea, Malaysia, and South Africa. This unexpected move rattled global sentiment and weighed heavily on U.S. equities.
- Nasdaq slides 0.4% Monday as new US tariffs hit sentiment and tech stocks weaken
- Tesla drops 6.8% after Musk’s political move adds uncertainty to the sector outlook
- RSI remains bullish while key support at 20,260 will guide near-term direction
The Nasdaq Composite dropped 1.45% to a two-day low at 20,327 before staging a partial recovery to close at 20410, ending Monday down 0.4%. Most sectors finished lower, with consumer discretionary stocks leading the losses. Tesla stood out as the worst-performing major tech name, sliding 6.8% after CEO Elon Musk announced plans to launch a new U.S. political party. This move added another layer of uncertainty around Tesla's strategic focus and distracted investors already wary of geopolitical risks.
NASDAQ price dynamics (May- July 2025). Source: TradingView
After the market closed on Monday, Trump announced further tariff measures targeting seven additional economies, including Indonesia and Bangladesh. These additional barriers could deepen trade tensions and pose extra downside pressure on technology stocks, which have been sensitive to global growth concerns.
Nasdaq RSI stays bullish despite Monday’s drop, suggesting buying pressure
Despite Monday’s drop, technical signals on the Nasdaq Composite continue to show resilience. The RSI on both the hourly and daily charts holds in bullish territory, suggesting there is still underlying buying strength. Key support levels are now in focus as traders weigh the potential impact of fresh tariffs. Immediate support lies at 20,260, marked by the 50 EMA on the hourly chart, which could provide a near-term floor. A decisive breach of this level could lead the index towards 20,200, which served as resistance during the December 2024 rally and is expected to act as a solid support barrier now.
Looking ahead to Tuesday, the market is on alert for a deeper pullback that could erase last week's gains and extend the week’s losses further. The fundamental backdrop driven by escalating trade tensions contrasts sharply with the technical signals pointing to possible upside continuation. This conflict between sentiment and technical strength creates a fragile setup where traders must closely monitor price reactions at key levels to gauge the next directional move.
The Nasdaq composite index broke above $20,420 and touched $20,620, showing strong bullish momentum. Trade optimism and strong earnings fueled renewed risk appetite.
