Overnight news causing sharp sell off

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August 01, 2025

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Good morning all and happy Friday! 

A sharp sell-off is underway, fueled by escalating trade tensions and broader economic concerns, here are a few things to look at for WHY we are dropping this morning.

1. New U.S. Tariffs on Global Imports

  • On August 1, 2025, President Donald Trump unveiled sweeping tariffs—ranging from 10% up to 41%—targeting imports from 92 countries, including Canada, India, Switzerland, and more. Some of these measures take effect as soon as August 7

  • European and Asian indices plunged, and U.S. futures declined by roughly 1%. Indian markets also dropped sharply amid concerns about 25% tariffs on Indian goods, pressuring sectors like metal, IT, and pharmaceuticals 

2. Macro Headwinds & Investor Sentiment

  • Confidence is shaking. Consumer sentiment has declined for four consecutive months, and CEOs are turning pessimistic

  • Inflation remains persistent, and with inflation staying elevated, markets are skeptical about when—and if—the Fed will reduce rates .

  • Interest rate expectations remain cautious, as many believe that interest rate cuts may be further delayed despite recent softer CPI readings .

3. Technical Warnings & Billion-Dollar Funds Turning Bearish

  • Trader Kevin Muir flagged warning signs: overconcentration in big tech, elevated valuations, extended rallies, and weakening technical momentum. He posits a potential 300-point decline in the S&P 500 with only a 100‑point risk buffer .

  • Additionally, volatility-control funds are reducing buy activity, removing a layer of market support.

4. Residual Trade Tensions & Profit-Taking

  • This sell-off mirrors the earlier 2025 correction that began in April, when Trump declared new tariffs on China, Canada, and Mexico—triggering a global market plunge and marking one of the fastest bear market formations in modern history .

  • With that event still fresh, investor sentiment is fragile and quick to react to escalating trade rhetoric.

With all this happening, I’ll be watching the jobs report for any spike, then fade for the rest of the day. I am a bearish trader this morning.

What about you?

Which sector is most vulnerable to the market turbulence today?

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P.S. Monday’s lineup (Eastern Time):

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