The Wallstreet Comeback: Tech Stocks Defying Stagflation, Trump Hinting Tariff Break & Exemptions

Overview:

After weeks of turbulence, Wall Street is showing signs of recovery—but uncertainty still looms. The Magnificent Seven tech stocks are leading to a potential rebound, while investors weigh the impact of Trump’s tariff policies and growing stagflation risks. With inflation concerns rising and global trade tensions escalating, the market's next move remains unpredictable.

Key Market Drivers:

• Stock Market Stabilization: Major indices rebounded after a sharp fall, with optimism growing among analysts.
• Tech Sector Strength: The Magnificent Seven (Apple, Amazon, Nvidia, Microsoft, Meta, Alphabet, Tesla) are fueling gains, though volatility persists.
• Tariff Uncertainty: Trump hints at possible tariff exemptions, but new levies on Venezuelan-linked oil imports add pressure.

Market Breakdown: Dow, Nasdaq & S&P 500

Dow Jones (DJIA)

• Gapped up at the start of the week, signaling bullish momentum.
• Potential breakout scenario with upside targets around 42,700 - 44,000.
• A pullback to 42,340 could present a bounce play.

Nasdaq 100 (NDX)

• Driven by Magnificent Seven, showing strong upside potential.
• Key resistance at 20,150, with a breakout target of 20,388.
• A dip to 20,098 - 20,070 may offer a long setup.

S&P 500 (SPX)

• Correlates with Nasdaq, following a similar bullish structure.
• Resistance at 5,180, with further upside if broken.
• Key retracement zone for buying opportunities at 5,120 - 5,100.

Trump on Tariff Exemptions

President Donald Trump has recently signaled potential exemptions for certain nations from the forthcoming reciprocal tariffs, stating he might "give a lot of countries breaks." These tariffs, aimed at equalizing U.S. duties with those of other countries, are scheduled for implementation on April 2. Trump also announced a new 25% tariff on countries purchasing oil or gas from Venezuela, in addition to the existing 20% tariff on China, resulting in a 45% tariff on such transactions.

Stock Market on Continued Upside

The stock market responded positively to these developments. On Monday, the Dow Jones Industrial Average rose by 597.97 points (1.4%), the S&P 500 increased by 1.8%, and the Nasdaq Composite gained 2.3%. Investors were encouraged by reports suggesting a more targeted approach to the tariffs. However, uncertainty remains due to the unpredictability of the administration's trade policies.

Signs of Stabilization

Morgan Stanley’s Michael Wilson believes the "Magnificent Seven" (Apple, Amazon, Nvidia, etc.) may recover, as earnings revisions stabilize ahead of the next reporting season.

Bank of America warns of stagflation—slow growth with high inflation—citing the Fed’s lowered GDP forecast (1.7%) and increased inflation target (2.7%). It advises investors to shift toward defensive sectors like energy, healthcare, and utilities.

The Magnificent Seven: Tech Titans Leading the Market

The Magnificent Seven—Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla—represent the dominant forces in today’s stock market. These tech giants have driven massive gains, shaped the overall US indices performance and influenced global markets.

Brace for Impact As April 2 Tariffs Commences

While the potential for tariff exemptions and targeted measures has provided some relief to investors and trading partners, the overall uncertainty continues to impact market stability and economic outlook. Businesses and policymakers are closely monitoring the situation as the April 2 implementation date approaches.

DOW JONES

4-Hour

Dow started the week, gapping up with a strong indication of bullish momentum ahead.

1-Hour

Potential Scenarios

1. Breakout Play

• Dow breaking out of the hourly range for an upside potential.
• Stops behind the structure.

2. Bounce Play

• Dow pulling back for a potential bounce play at 42340 level with 70.5 - 79 Fibo Level and MA50 support.
• Stops behind 79 Fibo or once price creates a range, stops can be set behind it.

Targets can be set at 42700 level with potential long targets at 44000 level.

NASDAQ

4-Hour

With the magnificent 7 leading the upside, Nasdaq has also been performing well. We’ve also outlined the potential move for Nasdaq last week, https://acy.com/en/market-news/market-analysis/fed-pause-sparks-relief-rally-dow-nasdaq-sp500-j-o-03212025-071406/, and is currently materializing, hitting our targets at 20150 or -62.0 Fibo Extension.

1-Hour

Potential Scenario

1. Breakout Play

• Once price breaks out, we could look for longs, targeting the -1.27 Fibo Level at 20388 level.

2. Bounce Play

• Long opportunity at 20098.74 - 20069.90 in confluence with 70.5 - 79.0 Fibonacci.

S&P

4-Hour

1-Hour

The same idea applies with S&P since S&P is correlated with NASDAQ.

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