Futures on U.S. and European indices fell following news of retaliatory measures from China. Euro Stoxx 50 futures declined by 0.1%, while S&P 500 and Nasdaq 100 futures dropped between 0.2% and 0.3%. The U.S. dollar weakened as investors speculated that China's countermeasures on tariffs are unlikely to avert the worst-case scenario in the escalating trade war.

The Xi Jinping administration quickly responded with tariffs on U.S. goods following the 10% tariffs implemented by the United States. Additionally, China announced an antitrust investigation into Google, citing potential violations, according to a statement released by the State Administration for Market Regulation.

China has also imposed 15% tariffs on U.S. coal and liquefied natural gas exports. 10% tariffs on oil and agricultural equipment.

These measures target key sectors of the U.S. economy, causing concern among American manufacturers. The increase in tariffs could lead to higher consumer prices and potential job losses in affected industries. Furthermore, the investigation into Google—already under scrutiny for its market dominance—could exacerbate tensions. Clearly, Beijing aims to protect its domestic market and local companies, which may trigger new legal and economic developments in the tech sector.

China's response appears calibrated to avoid significant harm to its own economy while demonstrating its capacity to inflict damage across multiple fronts. Although these measures resulted in a muted market reaction—especially after Trump signaled a willingness to talk with the Chinese leader—pressure on risk assets remains.

It's also worth noting that President Trump granted Canada and Mexico a one-month reprieve after imposing 25% tariffs on various goods. These delays have reinforced the perception that Trump views tariffs as a negotiating tool but still wants to avoid inflicting economic pain on Americans.

Following these developments, many experts returned to medium-term bullish strategies for risk assets, slightly softening short-term forecasts amid rising uncertainty.

West Texas Intermediate (WTI) crude oil fell by 1.9%, along with natural gas prices, as a direct consequence of Beijing's actions. Chinese stocks listed in Hong Kong continued to rise by 3% during the day.

In the corporate sector, UBS Group AG shares rose on Tuesday after the Swiss lender announced a $3 billion share buyback. BNP Paribas shares gained following a reported increase in trading revenues. Vodafone Group Plc shares declined after the telecom giant highlighted worsening conditions in Germany.

The yuan continues to face losses due to Chinese fiduciaries amid the escalation of the U.S.-China trade war. Meanwhile, Austan Goolsbee, President of the Federal Reserve Bank of Chicago, stated that the Central Bank should proceed cautiously with rate cuts in light of the growing uncertainty introduced by the Trump administration.

Today, we expect speeches from Raphael Bostic (Federal Reserve), Mary Daly, and Philip Jefferson

Demand for the S&P 500 remains strong. The primary objective for buyers today will be to break the nearest resistance at $5986. Achieving this will help continue the upward trend and open the door for a surge to $6003.

Another priority for bulls will be maintaining control over $6024, which would further strengthen buyer positions.

If the market moves downward due to declining risk appetite, buyers must assert themselves around $5967. A break below this level would push the index back to $5951 and potentially open the way to $5933.