Morning Note: Markets Tumble on Tariffs, Bitcoin Below $80K & Yen Gains

Stock Markets Sink as Trade War Heats Up

U.S. stock futures tumbled late Sunday, signalling a potential extension of the two-day selloff that erased trillions in market value following the Trump administration’s surprise tariff announcement last week. Investors braced for another volatile week as global trading partners react to the more aggressive-than-expected measures. As of Sunday evening, S&P 500 E-mini futures were down 4%, Dow E-minis dropped 3.8%, and Nasdaq 100 E-minis fell 4.6%. The tariffs' timing coinciding with the start of the Q1 earnings season further deepened investor pessimism.

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

From a technical analysis perspective, the S&P 500 index has been moving in a bearish trend since the end of February 2025, with the break below the ascending channel at the beginning of March 2025. Recently, the strong bearish momentum has driven the index downwards significantly with no pullback and has broken several significant order blocks. Therefore, such a valid bearish structure may indicate bullish force persists, potentially driving the index downwards to retest at the support zone of 4,550 – 4,600.

Bitcoin Slips Below $80K as Risk Sentiment Weakens

Bitcoin slipped below the $80,000 threshold on Sunday, as risk appetite deteriorated across global markets. The decline was accompanied by a surge in liquidations, which totalled $590 million for the day. Market anxiety, fuelled by President Trump’s proposed tariffs and rising geopolitical tensions, put pressure on risk assets.

Moreover, Bitcoin's long-short ratio dropped to 0.89, with short positions now comprising nearly 53% of open interest, highlighting increased bearish sentiment. As Bitcoin remains tightly correlated with global liquidity conditions, this shift reflects broader macroeconomic unease. With U.S. markets reopening on Monday, the weekend’s movements point to continued volatility ahead.

(Bitcoin Price Daily Chart, Source: Trading View)

From a technical analysis perspective, Bitcoin is currently in a bearish trend, as evidenced by the formation of lower highs and lower lows within a descending channel. Currently, the price is retesting the support zone between $78,000 and $79,200. If this support is decisively broken, the price may continue to decline, potentially retesting the lower boundary of the descending channel.

Investors Flee to Yen After Trump’s Tariff Surprise

Investors dumped the dollar on Monday in favour of currencies like the Japanese yen and Swiss franc, often used to hedge against risk or preserve capital. The sweeping tariffs triggered a flight to safety, with USD/JPY facing pronounced selling pressure commonly viewed as a proxy for both U.S. recession risks and Treasury yield performance. Despite its historical role as a safe haven, the U.S. dollar is losing appeal amid growing concerns that trade tensions could hamper economic growth and further erode yields.

(USD/JPY Daily Chart, Source: Trading View)

From a technical analysis perspective, the current trend of the USD/JPY currency pair has been bearish, as indicated by a series of lower highs and lower lows within a descending channel. Recently, the pair rebounded from the lower boundary of the channel, potentially setting up a move to retest the swap zone of 149.30 - 149.80. Conversely, if it breaks below the channel, it may continue to decline toward to retest the support zone at 141.80 - 142.30.

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