The S&P 500 experienced a sharp reversal following U.S. President Donald Trump’s surprise announcement of sweeping tariffs against major global trade partners, triggering broad-based selling in equities.

S&P500 Tumbles After Trump’s Tariff Blitz

Trump’s televised reveal included tariff hikes of 34% on Chinese goods, 20% on the European Union, and upwards of 46% on Vietnam, with Japan and Taiwan also targeted. The move sent shockwaves through global markets, with the S&P500 plunged from an intraday high of 5,733.48 to a low of 5,443.45, before modestly recovering to close at 5,519.13.

The new levies directly hit the tech supply chain, particularly in Asia, where many components for U.S. electronics are produced. Apple, Intel, and other major U.S. tech names are expected to face tighter margins and higher production costs.

Recession Fears Rising

Analysts from several firms have already flagged the move as a potential recession trigger, reminiscent of the economic self-harm seen during the Smoot-Hawley tariff era of the 1930s. U.S. consumer prices are forecast to rise sharply particularly for autos, where cost increases of $6,000 to $10,000 per vehicle are expected.

Despite White House claims that the tariffs are a negotiating tactic, uncertainty is already throttling long-term business confidence. Many firms are pausing capital expenditures until there is clarity on tariff permanence, while retaliatory trade measures from the EU and others appear imminent.

Technical Analysis for the S&P500

The S&P500 index plunged from an intraday high of 5,733.48 to a low of 5,443.45, before modestly recovering to close at 5,519.13. Its 15-minute chart showcases a dramatic surge followed by a sharp correction. The index rallied strongly to a high of 5733.48, supported by tight upward movement across short MAs (5,10,30), but faced an aggressive sell-off shortly after, plunging to a low of 5,443.45. This retracement was swift and heavy, as reflected in the steep decline on the MACD histogram and the bearish crossover.

Picture: SP500 slams the brakes after a rally with correction kicking in, but bulls eye a recovery, as seen on the VT Markets app

After hitting the low, the index began stabilising and consolidating, hovering near 5,519.13. The MACD is attempting a recovery, with histogram bars shifting into green, indicating early signs of renewed buying interest, but the moving averages remain tilted downward suggesting caution in the near term.

Cautious Forecast

Technically, a breach below 5,500 suggests fragile sentiment and increased volatility in the sessions ahead. Should it fail to reclaim the 5,600 level soon, a deeper correction toward 5,400 or below remains possible.

Market participants are now bracing for additional headlines, policy responses, and economic fallout. The tariff shock has jolted risk sentiment, and it’s likely only the beginning.