Tech leads US market rebound while economic indicators show strain
US equity indices rallied last week amid improving trade tension narratives, with technology sectors leading the advance:
Despite disappointing quarterly results, Tesla shares surged 18% after CEO Elon Musk announced reduced commitments to the Department of Government Efficiency (DOGE) from May onwards. Conversely, T-Mobile US plummeted 11% following subscriber acquisition figures that fell below analyst expectations.
Tariff implications are increasingly manifesting in macroeconomic indicators. The US composite purchasing managers’ index (PMI) contracted to 51.2 in April, a 16-month low, signalling decelerating business activity. Concurrently, price indices surged to 13-month highs. Manufacturing sectors experienced particularly severe impacts, attributable to tariff implementation, supply chain disruptions, and currency depreciation.
The University of Michigan’s latest survey indicated persistently subdued consumer sentiment and deteriorating labour market expectations, adding to concerns about the broader economic impact of ongoing trade tensions.
US Tech 100: technical analysis shows potential corrective wave formation
The US Tech 100 index breached its 20-day and 50-day simple moving average (SMA) during the recent recovery phase. Price action exhibits characteristics consistent with Elliott Wave structures, with the current advance potentially representing corrective Wave B formation.
The 0.618 Fibonacci retracement projection suggests potential upside to approximately 19,980 before bearish momentum resumes. For the current downward trend to truly reverse, the index needs to consistently stay above its 200-day SMA at 20,425. Key resistance sits at around 20,400, which will likely limit further gains unless there’s meaningful improvement in global trade relations.
