Dip on Duty—Markets Digest 25% Tariffs

E-mini S&P (September) / E-mini NQ (September)

S&P, yesterday’s close: Settled at 6276.00, down 48.25

NQ, yesterday’s close: Settled at 22,884.75, down 177.75

E-mini S&P and E-mini NQ futures edged lower yesterday after the opening bell before slipping late morning when President Trump detailed a 25% tariff rate on Japan and South Korea. Still, the impact on price has been muted given the ‘kick the can’ narrative with the measures associated with the July 9th deadline not taking effect until August 1st. Additionally, Japan and South Korea appeared eager to negotiate in response to yesterday’s measures and were warned against retaliation. China sent its message calling for ‘dialogue’ ahead of its August 12th deadline, while the EU remains in the balance. At the end of the day, everything is a deal to President Trump, whether it be tariff negotiations, peace talks, or a tax bill, and the market has now leaned probabilities towards inevitable progress or delays until progress is made. That said, it was not ironic that the pinnacle of yesterday’s market weakness was made when White House Advisor Peter Navarro came out of whatever bunker he’s been in since mid-April to comment on tariffs.

Amid yesterday’s pullback, price action in E-mini S&P futures responded to a direct test of major three-star support aligning with June’s settlement price at 6248.75-6253.75. The tape then levitated to close at 6276, which aligns with our momentum indicator to create our Pivot and point of balance. The E-mini NQ did bleed through its June settlement at 22,893, but nearly held this mark into settlement. This will align with the low of yesterday’s opening range to create our Pivot and point of balance. For both indices, continued price action below here will encourage additional selling. While that June settlement still stands as major three-star support for the E-mini S&P, we now do not have a major three-star level for the…..