FxWirePro: S&P500 to decline further as trade tensions simmer

U.S. benchmark stock index, S&P500 to face further decline as China steps up its own effort to counter U.S. tariff of 25 percent on Chinese goods worth $250 billion.

• China has already imposed tariffs on additional $60 billion U.S. goods in response to the latest escalation and talks in the Chinese media suggests that the government might take up specific measures targeting U.S. companies operating in China.
• We at FxWirePro previously discussed how the tariff war would hurt both countries and President Trump’s determination to bring back manufacturing jobs back in the United States would cost U.S. services, which enjoys global surplus, as well as a surplus with China.
• In response to the recent escalation of trade tensions where negotiations failed to yield results and both sides resorting to imposing tariffs on goods from the other, Chinese companies are asking their employees to cut back on U.S. products like Apple iPhones.

We expect further decline should the tariff war remain escalated.

Trade idea:

• Keep S&P500 short with the following targets - 2730, 2580, and 2510. The index is currently trading at 2790 area, down almost 170 points from the recent peak.