Nasdaq Composite renewed selloff triggered by tariff-driven risk aversion

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Nasdaq Composite renewed selloff

Highlights

Nasdaq rebound capped at 20 EMA as trade tensions reignite across global equity markets.

RSI neutrality confirms weak momentum, suggesting rebound may fade without strong bullish catalyst.

Traders brace for Powell’s address, IMF report, and major bank earnings this week.

Despite the positive start, the Nasdaq technical readings revealed that momentum did not shift decisively. The RSI on both the 4-hour and 1-hour timeframes stayed neutral and failed to enter bullish territory, reflecting hesitancy among traders to re-engage in strong buying after last week’s volatility. The lack of conviction signalled that the rebound was corrective rather than the start of a new uptrend.

Nasdaq price dynamic (Sept - Oct 2025). Source: Tradingview

The fragile tone was confirmed in Tuesday’s session, as the Nasdaq futures fell more than 1.5%, erasing most of Monday’s gains. Renewed anxiety over trade relations between the United States and China resurfaced after both countries began charging additional port fees on ocean shipping firms that transport essential goods ranging from crude oil to consumer items. The measure revived fears of a prolonged trade war and reignited selling pressure across equity markets. The downturn reflects a return of risk aversion among investors who are worried about rising costs and global supply chain disruption heading into the end of the year.

Rising volatility index signals traders bracing for heightened uncertainty

Market volatility has picked up sharply, as reflected in Wall Street’s “fear gauge,” which climbed to its highest level in almost four months. The increase in implied volatility came as traders balanced excitement over the next phase of AI innovation against fresh macroeconomic uncertainty and the start of the third-quarter earnings season. Tuesday’s calendar also includes major events capable of driving price swings, such as earnings updates from leading U.S. banks, a keynote address by Federal Reserve Chair Jerome Powell, and the release of the International Monetary Fund’s World Economic Outlook.

If the weakness extends through the week, the Nasdaq Composite could turn net negative for the week and test deeper supports. The 22,200 level remains immediate support, while the 100 EMA on the 4-hour chart below 22,000 forms the next downside target if selling pressure intensifies under the weight of trade concerns and market volatility.

Recently, we discussed Nasdaq extending its record streak to a fresh high at 23,060. The move reflected strong confidence in tech-driven earnings despite growing overvaluation concerns.

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