NEWS
How Trump's Tariffs Could Drive Up AI Data Center Costs for Big Tech

As Big Tech giants like Amazon, Microsoft, Google, and Meta race to build AI-driven infrastructure, they're facing an unexpected obstacle: President Trump's tariffs. These tariffs target imports from key countries, including China, Canada, Mexico, and potentially Taiwan. As a result, the cost of essential materials and equipment for building AI-powered data centers is set to rise significantly.

In 2025, Big Tech is poised to spend a record $325 billion to expand their data center networks. These centers are critical for powering AI innovations, but the rising costs of construction could impact their development timeline and bottom line. Analysts estimate that Trump's tariffs could increase commercial construction costs by 3-5%, directly affecting the price of materials like steel, aluminum, copper, and critical electrical components.

A significant portion of the equipment needed for data centers—such as servers, GPUs, and semiconductors—comes from Taiwan, China, and Mexico. With tariffs ranging from 10% on Chinese imports to 25% on goods from Canada and Mexico, these price hikes will inevitably trickle down to the construction and operation of data centers. Additionally, the supply chain for electrical components like transformers, which are essential for powering these facilities, is already under strain. Increased costs from tariffs on these components would add another layer of financial pressure on data center builders.

While these tariff-induced cost increases are inevitable, industry analysts suggest that data center operators may simply absorb the higher expenses to stay competitive. The demand for AI infrastructure is so high that they may opt to push forward with projects, even at the expense of profit margins.

MARKET
The Bottom Is Nowhere Near In Site

The U.S. stock market is facing more challenges this morning as trade concerns continue to weigh on investor sentiment. With President Trump's tariff discussions set for later this week, the market is bracing for further uncertainty. Over the weekend, Trump added confusion by suggesting tariffs could apply to "all countries" that import into the U.S., which is something the market hadn't anticipated. This has further deepened the uncertainty, as investors are trying to comprehend the full extent of these potential changes in U.S. trade policy.

Amid all the confusion, a significant amount of money—nearly $5 trillion—has been moving into safer investments, with gold being one of the main beneficiaries. Gold has reached new all-time highs, reflecting its appeal as a safe-haven asset during times of uncertainty. This surge in gold prices comes as the Trump administration's tariffs, which were announced earlier, are set to take effect this week. These tariffs, which Trump has dubbed “Liberation Day,” include a 25% tariff on cars not made in the United States. This has already caused a negative impact on major automotive stocks like Ford, General Motors, and Stellantis, which saw declines in pre-market trading.

The broader impact of these tariffs is causing a lot of concern. Trump’s statement that the tariffs will target all countries—not just those with trade imbalances with the U.S.—has left investors unsure about the long-term effects. Trump also remarked that he "couldn't care less" if foreign car manufacturers raise their prices due to these tariffs, which did little to calm fears. As a result, stocks ended the last full trading week of March on a down note, and the market remains volatile as it waits for more clarity on what these tariffs will mean for global trade.

Nasdaq

The situation in the QQQ continues to deteriorate, with the ETF expected to struggle significantly as growth stocks—particularly large and mega-cap tech names—come under pressure. These stocks have been the primary drivers of the Nasdaq’s direction, and their weakness is amplifying broader downside risks. The technical picture for the QQQ worsened last Friday when it decisively broke down from its rising bear flag, a pattern that often precedes accelerated selling. This breakdown occurred on very high relative volume, signaling strong conviction behind the move and a high degree of fuel propelling the decline.

Adding to the bearish structure, this breakdown also coincided with a loss of the Point of Control (POC) on the Visible Range Volume Profile (VRVP). In simple terms, the POC represents the price level where the highest amount of volume has been transacted over a given period, effectively acting as a key area of support or resistance. Once this level is lost, it suggests that the market no longer sees value at that price, often leading to further downside as trapped longs are forced to unwind positions. The absence of strong volume nodes beneath the breakdown point increases the likelihood of a fast and extended move lower, as price tends to seek out the next high-volume area for potential stabilization.

Structurally, this breakdown aligns with broader macro concerns. The Nasdaq's outperformance in recent months was largely driven by an overreliance on a few dominant stocks. Now that these names are faltering, the entire QQQ structure is showing increasing fragility. We don't see significant demand zones below the current price level, meaning there is no clear, tangible support in sight. With the QQQ breaking down in the premarket, it becomes challenging to pinpoint where a potential reversal might take place, as the lack of solid support levels leaves the market more susceptible to further downside pressure.

S&P Midcap 400

The midcaps are also experiencing significant breakdowns, with the VRVP (Visible Range Volume Profile) showing that they are currently testing their final dense layer of demand. This is particularly notable as the last time we saw this level was in early March, which prompted the beginning of MDY's low-volume rally and subsequent rising bear flag. However, the reality is that the MDY will likely continue to struggle. Until the broader market—namely the SPY and QQQ, the primary drivers of capital inflows into U.S. equities—starts performing better and shows signs of bottoming out, the MDY will likely remain under pressure. After all, why would investors choose riskier midcaps when they can wait for stability in the larger, more liquid sectors?

Russell 2000

The small caps are also breaking down from their dense volume cluster, continuing their markdown phase even lower. Technically speaking, the likely point of support for the IWM (Russell 2000 ETF) is the 200 EMA on the weekly charts, which is currently sitting at around $192. This suggests a further -4% breakdown from current levels.

According to the VRVP, this is where we see a dense pocket of demand, which could act as a potential support level for the small caps. However, given the broader market's weakness, it's hard to say if this will hold or if the IWM will continue its decline even further.

DAILY FOCUS
Too Early To Long, Too Late To Short

This is one of the most challenging market environments—where neither longs nor shorts present clear, high-probability setups. The SPY has already broken below key moving averages, with Friday’s decline seeing a surge in relative volume.

For those looking to short the broad market, or more specifically the QQQ—which would have been the best short given its growth-heavy composition, likely to struggle in an environment where growth is under pressure—the risk-reward dynamic has already shifted. The optimal time to be aggressive on the short side was earlier in the breakdown, around the $508 double top neckline. At that point, relative strength was rolling over, and the market structure was breaking down from overbought conditions, creating a clear and actionable short opportunity. Now, however, with breadth already deeply compressed and pre-market volume suggesting potential chop, the risk of getting caught in a sharp countertrend rally rises significantly. While the market can certainly remain weak, after such a swift markdown, initiating new shorts here carries greater risk of being squeezed during any potential bounce.

At the same time, you want to go long only when you actually see accumulation take place, typically marked by a breakout over overhead resistance. This is usually very obvious, especially when the market forms a base before breaking out, confirming that demand is stepping in with strength. It's this type of clear, high-conviction setup that gives confidence to enter long positions.

Right now, however, it's still clearly too early to go long. While the QQQ is testing its $465 prior reversal level, which did result in a brief bounce on March 10th, there’s still no solid evidence of buyers stepping in with any real conviction. For a legitimate long setup, you'd need to see signs of exhaustion—either through a high-volume flush into key support, a strong reclaim of lost levels, or even better, an actual double bottom reversal pattern. So far, none of these have materialized, and without them, any attempt to call a bottom remains speculative.

Thus, both shorts and longs are playing a waiting game right now—waiting for either further deterioration in the trend or a clear reversal signal. Until then, patience and precision are critical.

WATCHLIST
Some Great “Long” Trades…

AMZD: Amazon Bear 1x Shares ETF

• AMZD, an inverse ETF that tracks Amazon, is one example that’s breaking out from its overhead supply set over the last few weeks at the $13 level. A lot of traders often forget that when you see breakdowns, especially in closely watched names like Amazon (this concept is valid for a long list of other major stocks as well), you don’t have to short them directly. Instead, you can go long on an inverse ETF that tracks the price movement in the opposite direction.

• For example, instead of shorting Amazon directly, you can use AMZD to profit from its decline. Additionally, there are inverse leveraged ETFs available that allow you to amplify the moves. These leveraged ETFs can increase the volatility by factors of 2x, 3x, or even more, which can significantly enhance your returns when the stock declines. This offers a more accessible and strategic way to play the downside without the added complexities and risks of shorting individual stocks.

SPXS: S&P 500 Bear 3x ETF

• SPXS is an excellent example of how you can gain higher leverage on the long side in response to a breakdown in the broad market and not a specific stock. The SPXS offers 3x leverage to the S&P 500, meaning it amplifies moves in the index by a factor of three. This is extremely powerful, especially in volatile markets where large moves in the S&P 500 can lead to substantial returns.

• To put it into perspective, the SPY (which tracks the S&P 500) has an ADR% of 1.7%, whereas SPXS has a 5% ADR. This means that SPXS experiences much greater volatility, allowing traders to capture amplified moves when the market is breaking down.