The Market Brief
Hey team. Wall Street index futures dropped during early trading on Wednesday as new U.S. curbs on chip exports to China are the latest escalation of trade tensions between the world's two largest economies.
Let’s re-cap the prior session and see what’s next!
Impact Snapshot
🟥 Retail Sales - 8:30am
🟥 Fed Chair Powell Speaks - 1:30pm
Macro Viewpoint
No end in sight for this trade war as things keep escalating across the board, which heavily weighs in on investor sentiment. Markets lower on the back of US restrictions on NVDA chip exports to China.
Stocks closed mixed yesterday as many market participants remain in “wait-and-see” mode. 62% of SPX stocks finished lower, with only 4 out of 11 sectors finishing higher.
Given the recent weakness in survey data, today’s Retail Sales and the next NFP will be important for investors to assess the tariff impacts on the economy's growth.
No Max Panic yet
While the introduction of sweeping tariffs by the US triggered a sharp sell-off across regions, we are still not seeing overwhelmingly pessimistic sentiment.
Historically, a more pervasive washout sentiment levels have marked big lows in the market.
A potential explanation for the lack of widespread pessimism is that the waterfall decline followed by a swift rebound (global equities down only 4% since the liberation day) may not have provided sufficient time for fear to disseminate broadly.
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