NEWS
Tariffs Rattle Chip Stocks: Nvidia, TSMC Drop After Trump’s Surprise Move

Chip stocks took a hit in after-hours trading Wednesday following a bombshell announcement from President Trump: the return of sweeping reciprocal tariffs. Under the new policy, a global 10% base tariff will be layered with country-specific rates — including a 34% tariff on Chinese imports and 32% on Taiwanese imports.

That’s a big blow for U.S. tech firms heavily reliant on Taiwan and China for advanced semiconductors. Nvidia (NVDA) shares sank 4.7% after hours. TSMC (TSM), the Taiwanese chip giant that manufactures cutting-edge chips for Nvidia and Apple, fell 4.8%. AMD dropped 4.5%, Broadcom lost 5.2%, and Micron — which provides memory for Nvidia’s GPUs — tumbled 6.4%.

These tariffs threaten to disrupt the flow of AI servers into the U.S., especially those powered by Nvidia’s chips. In 2024 alone, Taiwan exported over $50B worth of computer hardware (including GPUs and servers) to the U.S., while China sent more than $50B as well.

Trump defended the move, saying, “Taiwan, they took all of our computer chips… Now we have almost none.” He cited TSMC’s $100B investment in Arizona as a step toward reshoring, but experts remain uncertain how tariffs alone would spur large-scale domestic chip production.

If these policies stick, it could mean higher prices for consumers and slower adoption of next-gen AI tech — and a new wave of volatility in chip stocks.

MARKET
All Sectors & Industries Break Down Lower

The premarket action this morning is a clear reflection of panic and fear sweeping through the market. The U.S. equities market is in a full breakdown, erasing trillions of dollars in value in just hours. Institutional investors are clearly losing faith in holding long positions in what has long been considered the world's strongest and most resilient market.

Yesterday marked the announcement of Trump’s “Liberation Day,” with sweeping tariffs slapped on nearly every major economy, most notably China, which now faces an effective tariff rate of 54%. In response, China retaliated with a 67% tariff. This is just the start, and we can expect this situation to escalate further.

The market responded violently, with stock futures plunging, as Trump’s tariffs were far more aggressive than anticipated—at least 10% across the board, with some countries facing even higher levies. This increases the risk of a global trade war, a prospect that will almost certainly weigh on the already fragile U.S. economy.

So, why the severe reaction? Every sector is breaking down, and the stocks leading the charge in U.S. tech dominance are getting hit the hardest. The reason is simple: the market had priced in tariffs, but what happened yesterday caught everyone off guard. Tariffs are coming in much higher than anyone expected, and that’s forcing the market to re-price risk across the board—leading to massive liquidation.

As traders, our role is not to impose personal biases or engage in political opinions. Our responsibility is to analyze and evaluate the current state of the market, focusing solely on how it’s behaving right now. Our goal is to determine the best course of action based on market dynamics, price action, and risk management, without getting caught up in external factors or emotions. What matters most is how the market is moving, not the political drama unfolding behind the scenes.

Nasdaq

The QQQ is feeling the brunt of the sell-off right now, and it's no surprise given the direct impact the tariffs are having on the growth-heavy sectors, particularly tech and AI, which dominate the ETF. Big names like NVIDIA (NVDA), Meta (META), Tesla (TSLA), and others are among the biggest losers this quarter, and the tremendous selling pressure is being felt across the board.

Looking purely at the technicals of the QQQ, we’re seeing a premarket breakdown that’s pushing it below prior bounce levels. The momentum is pointing towards a move lower, with the weekly Point of Control (POC) on the Visible Range Volume Profile (VRVP) coming into play around $445. This is where we see the first high-density area of potential demand, but given the current environment, it’s likely we’ll experience some choppiness before reaching this level.

What makes this setup even more significant is the rejection we saw earlier this week just above the 50-week EMA. This area had been acting as a key level of resistance, and with the market pushing back against overhead supply, it further confirms that the QQQ is in a long-standing bearish trend. The longer the time frame you look at, the more significant the technicals, and right now, the QQQ is showing all the signs of continued weakness.

The monthly chart is where things start to look especially concerning. Looking at the QQQ, we see support coming in at the rising 20-month EMA around $450, which is likely to get tested this week. This level is critical—if the QQQ breaks down below $450 and loses the 20-month EMA, we are officially in bear market territory.

Take note of the 2022 bear market on the left side of the chart. That was the last time we saw the 10-month EMA break on high relative volume, and what’s particularly worrying is the similar price action we’ve seen recently. Just like in 2022, we’ve experienced an increase in relative volume—almost a 100% spike from the prior month. This suggests that the market is experiencing the same type of liquidation pressure as we saw during the previous bear market, and the growing volume indicates that more institutional selling could be in the pipeline.

The fact that this is happening on the monthly chart, which reflects a longer-term trend, makes this more significant. If the 20-month EMA doesn’t hold here, we could see major downside in the QQQ, possibly even testing the next major levels of support. So, this week’s price action around $450 will be crucial in determining whether we are just in a short-term correction or if we’re facing the beginning of a larger, longer-term bear market.

S&P Midcap 400

The midcaps are also breaking down from a significant level on the weekly chart. The Point of Control (POC) at $531 is being lost in premarket trading, further confirming the ongoing bear market formation. The 10-week EMA has now crossed below the 50-week EMA, signaling a shift towards a deeper and more sustained bearish trend.

While it’s not entirely surprising that the midcaps are struggling, it's crucial to note that if we don’t see some reversal action this week, there is a low-volume pocket on the Visible Range Volume Profile (VRVP) down to $501. This area may very well get filled if the aggressive selling pressure continues, as there’s minimal support in that range.

Russell 2000

The small caps are currently testing their 200-week EMA, which is a critical level to watch closely. As of the time of writing this report, the IWM is hovering at this major support point, and if we do not see strong support here, it could lead to some very painful price action. The 200-week EMA is often a significant long-term indicator, and a breakdown below this level would suggest a deeper move lower.

The last time the 200-week EMA was tested, we saw the IWM chop around this level for almost 2 years, with little direction or clarity. That prolonged period of consolidation was marked by significant volatility, and if we fail to hold this level again, we may see a similar period of indecision, with continued downside risk.

DAILY FOCUS
Evaluate, Observe & Keep Calm

As the market continues its sharp sell-off, with trillions in market value wiped out in hours, the uncertainty and volatility are palpable. It’s easy to get caught up in the panic, but this is where our discipline as traders becomes crucial.

Evaluate: The current market environment is undeniably bearish, with sectors across the board breaking down. We’re seeing broad-based declines, but as always, the market is rarely uniform. This is the time to evaluate key support levels and the overall trend—are we nearing critical levels where buying interest might step in, or is there more downside to come? Don’t get caught up in the noise—focus on what the price action is telling you and whether we’re in the early stages of a deeper pullback.

Observe: Keep running your scans, even in these turbulent times. Identify which stocks are holding their key levels best today. Are there any sectors or individual names that are showing relative strength, despite the overall market decline? Pay close attention to volume and price action around these levels, as they can provide clues about which stocks might offer opportunities once the dust settles. Tracking how stocks react to market chaos is invaluable in identifying potential buying points in the future.

Keep Calm: When the market moves this fast, emotions can drive decisions—but we’re not here to speculate or react impulsively. Stick to your trading plan and risk management. Patience is your ally right now. There’s no need to chase the market, whether on the long or short side. If a trade doesn’t align with your strategy or risk tolerance, stay in cash and preserve capital. The key right now is to wait for clarity—let the market show its hand before you make your next move.

WATCHLIST
This Really Isn’t The Time