Stock futures only ticked higher for a short time, the day after Donald Trump's cornerstone speech to the U.S. Congress. The key indexes of Wall Street remain under pressure while rolling back to their pre-election support areas of early November. The low for the tech-heavy Nasdaq 100 indicator was noted 33 points above the 20,000 landmark, when the broader market's S&P 500 measure briefly dipped below 5,750 on March 4.

A sell-off sentiment dominates, but faint hopes for possible tariff relief appeared when Trump's team top official, the commerce secretary Howard Lutnick, noted that the U.S. president could later ease some tariffs he has already imposed on trade partners. To be more precise, Lutnick mentioned that some relief on import of items like cars and auto parts could be granted if that complies with the U.S.-Mexico-Canada free-trade agreement. Shares of Ford (F) and General Motors (GM) regained 1.75% and 3.75%, respectively, as a response to this comment to partially offset a much stronger weekly loss.

Global markets predictably reacted painfully on risks that Donald Trump would follow his threats to additionally impose "reciprocal" country-specific tariffs on April 2, if countries like Mexico, Canada and China will persist with their retaliate measures against the first portion of U.S. tariffs. These could add more barriers on all imports from Europe, as well as product-specific tariffs on not only metals, but also pharmaceuticals, semiconductors and the agricultural segment. Among other tariff precedents, Trump reiterated his thoughts of the "very unfair" tariffs imposed by India, which "charges us auto tariffs higher than 100 per cent". Thus, he announced the same sizes of "reciprocal" tariff rates on nations that impose their tariffs on U.S. exports, if foreign countries will keep their tariff regulations valid within one month more. "Other countries have used tariffs against us for decades, and now it's our turn to start using them against those other countries," Trump declared in his yesterday's address to a Joint Session of Congress.

Regarding how the prospect of further trade battles may negatively affect the incomes of American sellers in the confrontation between the U.S. and Canada, some Canadian provinces have already made non-tariff decisions to stop selling bourbon and other classic American goods, while the premier of the Canadian province of Ontario terminated a $100 million contract with Elon Musk's Starlink company and banned those U.S. companies "who contribute to economic attacks" from participating in public procurement. Worsening trade relations can negatively affect the purchasing power of ordinary Americans, among other things, when data shows consumer sentiment's decline.

Morgan Stanley survey polled nearly 2,000 consumers to reveal also a stark divide in sentiment along political lines, with "liberals displaying a more pessimistic view than conservatives", but this "does not immediately signal a reduction in consumer spending". Morgan Stanley economists foresees rather "a slowdown in spending growth due to the effects of immigration and tariffs" while "spending intentions remain robust". It seems that consumers may become more nervous in advance because of the hype about tariffs in the media, even if they cannot feel the effect yet in their wallets.

It is worth mentioning that Trump’s commitment to extend his 2017 tax cuts is welcomed. This could offset most of the potential negative impact from tariffs issue as the same combination of agenda already buoyed an extremely bullish market sentiment during Trump's first presidential term. And Trump has reiterated all of his tax cut plans. Again, many of outdated legal requirements would be massively abolished, with new presidential decrees being adopted for faster economic growth. There is encouraging news about an unprecedented investment of $500 billion from Apple Co in new production facilities in the U.S. over the next 4 years. Thanks to this news, shares of Apple remained calm and rather high on the sidelines of the south route during the broad bloodbath of tech giants, when flagship companies such as NVIDIA, Broadcom, Meta, Amazon, Google and many others are subjected to a fundamentally undeserved sale.

We consider this sell-off to be detached from actual fundamentals, expecting excellent entry points for buying opportunities to come soon. The reason behind this logic is that tariffs can dominate people's consciousness, but they do not determine the basics of big tech business, because all technology giants have a global nature of their growing revenue collection, not too much dependent on cross-border trade affairs. They won't be affected by whether Canadians go on vacation to Florida or somewhere else. Their manufacturing capabilities are also dispersed across different continents, and NVIDIA happily avoided restrictions on the supply of chips to China, which looked worse than Trump's tariffs. Again, investors don't like the fact that Trump's tariffs are delaying a reduction in the cost of borrowing from the Federal Reserve. Federal Reserve Bank of New York's head John Williams clearly said that tariffs "drive up inflation risks to some degree", while current rate policy is in good place right at the moment. Tariffs that "hit consumer goods could flow through quickly to inflation" while other parts of the economy might see a slower moving impact, he added. This is important in terms of market's expectations from what the U.S. central bank could do, but interest rates are surely not the most important driver under the global AI and, generally, tech boom.

The tech rally will survive the current pullback and resume, as it has gone beyond the similar agenda in 2017-2018. The world will "get by" and investors should "buy the dip", Blackrock CEO Larry Fink said at the 2025 RBC Capital Markets Global Financial Institutions Conference a day ago. His point of view was that companies and governments would "recalibrate" with possible near-term volatility, but accompanied by mid- and long-term "opportunities to own stocks". “The world is fine. There is a lot of noise, but the world and the U.S. will get by", Fink said at the event, and we fully agree with this concept. The Nasdaq index may well slip to, say, between 17,000 and 18,500 due to rising crowd fears, but it will reach at least 25,000 during this year.