Nasdaq 100 Forecast: QQQ tumbles after China retaliates

US futures

Dow future -3.0% at 39313

S&P futures -3.5% at 5208

Nasdaq futures -3.4% at 17900

In Europe

FTSE -4.3% at 8082

Dax  -4.5% at 20720

• Trade war escalates as China retaliates
• Recession fears rise hitting risk sentiment
• US non farm payrolls rose by more than expected
• Oil tanks 7%

Recession fears send stocks plummeting

US stocks are set to open sharply lower on Friday after China imposed trade tariffs on all US imports in retaliation to Trump's sweeping taxes, escalating a global trade war.

China announced additional tariffs of 34% on all US goods from April 10 after Trump lifted trade tariffs to the highest level in over a century earlier this week.

The tariffs have rattled global financial markets raising fears of a worldwide economic slowdown. Meanwhile, US recession fears have also picked up with JP Morgan now seeing a 40% probability of a recession in the coming 12 months.

On the data front US non-farm payrolls added 228,000 jobs in March significantly higher than the 135,000 that were forecast and and well up from the downwardly revised 117,000 in February.

Meanwhile the unemployment rate unexpectedly rose to 4.2% up from 4.1% and average hourly wage growth increased to 0.3% on a monthly basis in line with expectations. The jobs data momentarily helped to steady the selling but the main focus remains on trump's trade tariffs.

Attention will now be on Federal Reserve chair Jerome Powell who is due to speak and could provide some insight into the stance at the Federal Reserve in light of the deteriorating outlook and rising economic uncertainty. The market has lifted fed rate cut expectations to a 50% probability of four rate cuts this year which was unheard of before Wednesday.

Corporate news

Banks are in focus and taking a big hit amid increasing fears of a U.S. economic slowdown due to the escalating global trade war. Banks are particularly sensitive to macroeconomic conditions. Goldman Sachs and Morgan Stanley were down 6%, with JP Morgan and Wells Fargo down 5%.

Apple is falling another 5% in premarket trading after China announced its retaliatory tariffs against the US. China accounts for around 80% of Apple's production capacity, with 90% of iPhones assembled in the country.

Chip stocks are also under pressure due to their large exposure to China. Broadcom and Intel are down 7%, with Nvidia and Qualcomm down 6%.

Nasdaq 100 forecast – technical analysis.

The Nasdaq face rejection at 200SMA rebounded lower taking out support at 18,350 the September low to a nadir of 17670. The RSI has fallen into oversold territory, and the long lower wick on the candle means sellers should be cautious chasing losses lower. Resistance can be seen at 18,350.

FX markets – USD rises, EUR/USD falls

The USD is rising off the slightly stronger than expected US nonfarm payroll report, but still remains depressed across the week after Trump's trade tariff announcement fuelled recession fears.

The EUR/USD is falling giving away earlier gains But still remains above 110 and is set to gain over 2% this week owing to U.S. dollar weakness. The euro has been a big benefit are from the sell off in the USD despite 20% trade tariffs set to be applied from April 9.

The GBP/USD is falling amid the risk-off mood but remains above 1.30. The pound is still on track to gain of 0.55% this week benefiting from U.S. dollar weakness.

Oil falls 7%

Oil prices have fallen 7% today dropped to their lowest level since COVID. Trade tariffs developments are raising recession fears and hurting the demand outlook.

A trade war between the US and China, the world’s largest oil consumer and China the world’s largest oil importer could hit demand hard. This comes as OPEC said they would increase output in the meeting earlier this week.