Morning Note: S&P 500 Surges on Tariff Optimism as Tesla Jumps 10%

S&P 500 Surged on Tariff Optimism

On Monday, the S&P 500 surged 100.01 points, or 1.76% and closed at 5,767.57. This was mainly driven by President Donald Trump's announcement that automobile tariffs would be implemented soon, stating that many countries might receive exemptions, though he provided no specifics. While he remains committed to introducing new reciprocal tariffs next week, uncertainties persist regarding the extent of the duties and the nations that will be affected. These restrictions, along with a primary concern over reducing government spending, led to lowered key business insights that were higher than the sentiment index. Therefore, the belief in accomplishing such high business progression has decreased substantially since 2022.

(S&P 500 Daily Chart, Source: Trading View)

From a technical analysis perspective, the index has recently broken above the swap zone of 5,670 – 5,700 with significant bullish momentum and a gap-up movement. It may potentially surge further to retest the resistance zone at 5,810 – 5,840. If it breaks above this resistance zone, this could signal a shift from a bearish to a bullish trend, potentially driving the index higher. Conversely, if the resistance zone rejects the index from moving higher, it indicates that bearish forces persist, potentially driving the index lower.

Trump Imposes 25% Tariff on Venezuelan Oil Buyers

On Monday, Trump issued an executive order mandating that any country purchasing oil or gas from Venezuela will face a 25% tariff on U.S. trade transactions. Additionally, his administration extended the deadline for U.S. energy giant Chevron to cease operations in Venezuela. Imposing tariffs on foreign buyers of Venezuelan crude could reduce the country’s oil exports, leading to price discounts and mirroring the impact of secondary sanctions Trump introduced during his first term in 2020.

(U.S Crude Oil Futures Daily Chart, Source: Trading View)

From a technical analysis perspective, the recent price action has found support in the 66.20 – 66.50 zone, surging upward with bullish momentum. This is a key support level that has been verified multiple times in the past, suggesting that the price may continue riding this bullish momentum and potentially retest the swap zone at 70.00 – 70.50. If the price can break above this zone, further upside movement is possible.

Tesla Soars 10% on China Expansion Hopes

Tesla shares surged 10% on March 24, breaking a prolonged nine-week losing streak that had nearly halved the stock’s value from its recent peak. Sources indicate that Tesla is nearing approval to introduce its Full Self-Driving (FSD) technology in China. If legislative clearance is granted, it could unlock significant market expansion for the company in the world's largest automotive market. Additionally, investor sentiment improved following Trump’s decision to scale back previous tariff threats, which had impacted the broader automobile and technology sectors. The move signalled a temporary easing of U.S.-China trade tensions, bolstering risk appetite in the market.

(TSLA Shares Price Daily Chart, Source: Trading View)

From a technical analysis perspective, Tesla's share price has been surging with bullish momentum and a gap-up movement recently, closing near the upper end of the 267 – 279 swap zone. If it breaks above this zone, it could potentially continue rising to retest the 353 – 364 resistance zone. Conversely, if it fails to close above the swap zone in the near term, bearish forces might push the price downward to retest the 169 – 183 support zone.