To The Moon

The stock market did not continue the momentum on Thursday (10 Apr) following Wednesday (09 Apr) impressive rally which was catalysed by President Trump's announcement of a 90-day pause on reciprocal tariffs for most countries, except China.

Major indices opened lower and remained in negative territory, though these indices did try to crawl back some losses by the afternoon.

DJIA, $NASDAQ(.IXIC)$ , $S&P 500(.SPX)$ and Russell 200 was down 2.50%, 4.31%, 3.46% and 4.27% respectively, this was a slight improvement from its lowest during the day.

Decliners outpaced advancers by more than an 8-to-1 margin at the NYSE and more than a 4-to-1 margin at the Nasdaq. Year-to-date performance shows the Dow Jones Industrial Average down 7.1%, the S&P 500 down 10.4%, the S&P Midcap 400 down 14.0%, the Nasdaq Composite down 15.1%, and the Russell 2000 down 17.9%.

VIX Above 50 Correlate To The Fear and Greed Index Indicator At 8 (Extreme Fear)

We have seen the realization that the U.S. economy is still vulnerable, with only a "pause" on reciprocal tariffs and a baseline 10% tariff rate still in effect. White House clarification of a 145% tariff rate for China, including a 125% reciprocal tariff and an existing 20% tariff related to fentanyl.

Renewed selling by cautious investors using the previous day's rally to sell at higher prices. Comments from Federal Reserve officials expressing concern over tariffs driving inflation and reluctance to cut rates soon. Disappointing earnings from CarMax (KMX), which fell 19.5% to $66.43. Concerns about the budget deficit following the House's passage of a reconciliation resolution that includes tax cuts without sufficient spending cuts.

Sharp declines in the dollar against other major currencies due to concerns about U.S. growth, budget deficit, and policy volatility, with the U.S. Dollar Index falling 1.9% to 100.98.

The CNN Fear and Greed index has showed an extreme fear indication at 8. this is an indication that market selloffs might continue further.

The $Cboe Volatility Index(VIX)$ surged above 50, indicating heightened market anxiety. This spike highlights the rapid shifts in investor sentiment, following a historic rally driven by President Trump's tariff suspension announcement. The bond market remains under pressure, underscoring the persistent economic uncertainties.

Banks Earnings Anticipated To Reduce FY 2025 Revenue Guidance

Morgan Stanley analysts anticipate banks to lower revenue guidance for FY 2025 amid economic uncertainty. The firm predicts a "meet and keep" quarter for large-cap banks, with tempered expectations for investment banking and wealth fees due to recent market volatility.

Ten S&P 500 Sectors In The Red

The March CPI report brought positive inflation news, but market sentiment remained unaffected as participants anticipate higher prices due to tariff impacts on supply chains.

Ten of the 11 S&P 500 sectors finished lower, with consumer staples as the sole gainer (+0.2%). The energy sector was the biggest loser (-6.4%), followed by information technology (-4.6%), consumer discretionary (-4.1%), communication services (-4.1%), and materials (-3.0%).

The Philadelphia Semiconductor Index, which rose 18.7% the previous day, fell 8.0% today. The $Vanguard Mega Cap Growth ETF(MGK)$ declined 4.1% after a 12.2% increase the previous day.

Stocks To Watch

Semiconductor stocks experienced a significant decline as Broadcom (AVGO) and Nvidia (NVDA) led the downturn, with Broadcom dropping 7% and Nvidia over 5%. This comes a day after both stocks surged over 10% following President Trump's announcement of a 90-day tariff suspension.

Other semiconductor companies, including AMD (AMD), Intel (INTC), and Marvell (MRVL), also saw substantial losses, reflecting ongoing market volatility and trade concerns.

$Taiwan Semiconductor Manufacturing(TSM)$ reported a 42% surge in Q1 revenue, driven by strong demand for AI servers and smartphones. The company exceeded analyst expectations, marking its fastest growth pace since 2022, amid concerns that tariffs could impact electronics demand.

We will need to watch closely on whether TSM would be making the AI servers for US market in the U.S. if that happen, they could be capturing the market. We can see similar action from the bulls trying to make a daily uptrend, but that would depend on how the tariffs stories going to develop.

$Amazon.com(AMZN)$ faces challenges as Chinese sellers on its platform consider price hikes or market exits due to increased tariffs. The Shenzhen Cross-Border E-Commerce Association warns that the new tariff structure could overwhelm costs, threatening seller viability in the U.S. market.

I would think that the bulls for Amazon is trying to make a daily uptrend, but it looks like the price hikes or Chinese sellers exiting from Amazon E-commerce platform might hit AMZN hard.

The only things that could be powering Amazon would be its cloud services as this could move customers who are using Chinese cloud in the U.S. to shift as the tariffs on the services could be huge. Amazon might need to adjust its strategy to invest in other markets which are looking to grow E-commerce.

Will we see a consolidation of E-commerce platform in regions other than China?

Summary

I think the mega cap and tech stocks price are at a discounted, but we need to look at the overall market condition as investors are losing confidence in the U.S market, as there is still uncertainity on how tariffs is going to develop after the 90-day pause.

The current inflation caused by rising prices would need to be watched, would we see a rate cut as early as May or June, if that happen, will this help to bring investors back to the market?

Appreciate if you could share your thoughts in the comment section whether you think market sentiment would improve as we get more clarity on the tariffs or the fear sentiment would continue.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.