Global stock indices plummeted again following a minor correction amid tariffs imposed by US President Donald Trump. Find out more in our analysis and forecast for global indices for 4 February 2025.
US indices forecast: US 30, US 500, US Tech
- Recent data: tariffs on goods from Canada and Mexico have been postponed for 30 days, while trade restrictions against China have already taken effect
- Market impact: tariffs may trigger inflation, jeopardising the US Federal Reserve’s plans to lower the key rate, an important indicator for the stock market
Fundamental analysis
US President Donald Trump intended to impose 25% tariffs on goods from Mexico and Canada but decided during the negotiations to put this measure on hold for 30 days. Mexico and Canada’s leaders promised to address migration and border control issues during this time.
Tariffs of 10% on goods from China remained unchanged. China, in turn, imposed a 10% tariff on US oil and agricultural machinery and a 15% duty on coal and LNG. It also announced export controls on goods related to tungsten, tellurium, bismuth, molybdenum, and indium.
US 30 technical analysis
Bulls and bears are now struggling for the 44,325.0 support level. The price will highly likely break below it and form a downtrend. Otherwise, the quotes will enter a sideways channel, with the uptrend unlikely to continue.
The following scenarios are considered for the US 30 price forecast:
- Pessimistic US 30 forecast: a breakout below the 44,325.0 support level could send the index down to 43,385.0
- Optimistic US 30 forecast: a breakout above the 45,000.0 resistance level could drive the index to 45,410.0
US 30 technical analysis
US 500 technical analysis
The US 500 stock index is trading within a sideways channel. The 5,925.0 support level was not breached during yesterday’s correction. Sellers may attempt to surpass this level once again. If they fail, the sideways channel will remain relevant in the medium term.
The following scenarios are considered for the US 500 price forecast:
- Pessimistic US 500 forecast: a breakout below the 5,925.0 support level could push the index down to 5,800.0
- Optimistic US 500 forecast: a breakout above the 6,125.0 resistance level could propel the index to 6,230.0
US 500 technical analysis
US Tech technical analysis
The US Tech stock index, like other US indices, is in a sideways channel. The uptrend will unlikely begin. The price will unlikely reach a new all-time high either. If the price breaks below the support level, a medium-term downtrend could start.
The following scenarios are considered for the US Tech price forecast:
- Pessimistic US Tech forecast: a breakout below the 21,030.0 support level could send the index down to 20,530.0
- Optimistic US Tech forecast: a breakout above the 21,935.0 resistance level could push the index up to 22,220.0
US Tech technical analysis
Asian index forecast: JP 225
- Recent data: Japan’s manufacturing PMI came in at 48.7 in January
- Market impact: the decline in PMI shows weakness in the manufacturing sector, which may negatively affect the stocks of companies related to manufacturing, machinery, and exports
Fundamental analysis
The manufacturing PMI reading of 48.7 in January (down from 49.6 earlier) indicates a stronger decline in the Japanese manufacturing sector. This may be due to more sluggish demand in the country and export markets, rising costs, and other economic factors. The decline in manufacturing activity may weigh on the country’s overall economic outlook, making investors wary.
Japan’s stock market may come under pressure in the short term. However, the Bank of Japan’s decisions and the current policies of the new US administration have a great impact on investors.
JP 225 technical analysis
The JP 225 stock index has been trading within a sideways channel since September 2024. There are no prerequisites for a trend to form in the medium term. While the channel boundaries may change insignificantly, the trend itself suits most market players.
The following scenarios are considered for the JP 225 price forecast:
- Pessimistic JP 225 forecast: a breakout below the 38,275.0 support level could push the index down to 37,230.0
- Optimistic JP 225 forecast: a breakout above the 40,625.0 resistance level could propel the index to 41,595.0
JP 225 technical analysis
European index forecast: DE 40
- Recent data: Germany’s preliminary CPI was 2.3% year-on-year in January
- Market impact: easing inflation may prompt the ECB to lower the key rate more actively, which will support the stock market
Fundamental analysis
The fall in annual inflation to 2.3% (expected at 2.6% and previously at 2.6%) indicates that price growth is gradually stopping. This may be due to easing pressure on energy prices and stabilisation of global supply chains. Falling prices may be indicative of sluggish demand or an economic slowdown, which could adversely affect domestic-oriented companies.
Additionally, a trade conflict between the EU and the US over tariffs is looming. Donald Trump is threatening to tighten trade conditions, including for the EU, which will weigh on the stocks of exporting companies. As the EU leader, Germany will suffer from these restrictions more than other eurozone countries.
DE 40 technical analysis
The DE 40 stock index remains in an uptrend after a 2.8% correction. According to the DE 40 technical analysis, it will continue in the short term, with the price reaching a new all-time high. The downtrend could form only if the price breaks below the 21,080.0 support level.
The following scenarios are considered for the DE 40 price forecast:
- Pessimistic DE 40 forecast: a breakout below the 21,080.0 support level could send the index down to 20,445.0
- Optimistic DE 40 forecast: a breakout above the 21,800.0 resistance level could drive the index to 22,010.0
DE 40 technical analysis
Summary
US indices entered the sideways channel, expecting new tariff moves from the US administration. The only exception is the DE 40 index, which remained in an uptrend after the correction. Japan’s JP 225 index has been trading within a sideways range since September last year.
Source: Roboforex
