^GSPC Today, January 20: EU €93B counter-tariffs revive trade risk
U.S.-EU tariffs are back in focus after reports that the EU may approve up to €93B in EU counter-tariffs if Washington raises rates from February 1 over the Greenland tariff dispute. A renewed U.S.-EU trade war could fuel inflation, disrupt supply chains, and hit multinational earnings. The S&P 500 (^GSPC) is sensitive to these shocks, with traders watching key levels and headlines. We explain what changed, how markets look now, and what matters for investors in Japan.
EU’s €93B response and the Feb 1 trigger
Brussels is weighing up to €93B in EU counter-tariffs and potential anti-coercion measures in response to planned U.S. hikes from February 1 tied to the Greenland tariff dispute. The package aims to deter pressure on EU policy, while limiting blowback on EU industry. Initial reporting points to a list targeting sensitive U.S. goods, with legal review underway. See details: source.
The threat covers imports from eight European countries, reviving the risk of a wider U.S.-EU trade war. Retaliation invites a new tariff cycle that raises import costs, complicates sourcing, and squeezes margins. Markets will focus on the final scope, exemptions, and the timetable. Early reaction underscores headline risk. Background on U.S. plans: source.
S&P 500 snapshot: levels and volatility
The index prints 6940.0, down 0.06% on the day, after opening at 6960.54 versus a previous close of 6944.47. The range is 6925.09–6967.30, with a year high at 6986.33. Momentum is mixed: RSI 57.52, MACD histogram 2.78, and ADX 12.18 signals no strong trend. On-balance volume is 63.90B, and turnover at 5.36B shares tracks slightly above the 5.07B average.
ATR sits at 59.05, implying typical daily swings near 0.85%. Bollinger Bands show 6980.35 (upper) and 6752.45 (lower), with the middle near 6866.40. Keltner upper is 6988.14, a cluster with the year high that could cap rallies on tariff headlines. Support sits near 6866 and 6752 if risk aversion rises.
Implications for Japanese investors
For Japan, U.S.-EU tariffs raise demand and cost risks for exporters tied to both markets. Autos, machinery, and semiconductor suppliers could face weaker orders, higher component costs, or re-routing of shipments. Supply chain delays may stretch cash cycles and trim margins. Watch management guidance on pass-through and inventory, and note any shifts in capex plans or pricing strategies this quarter.
Keep a clear catalyst map: the February 1 U.S. move, the EU’s final list, and corporate guidance dates. For equity exposure, monitor companies with high EU-U.S. revenue mix and thin margins. Consider balancing cyclical exporters with defensives that benefit less from global trade. Review stop levels against ATR and key index bands to avoid outsized downside.
Inflation, supply chains, and earnings sensitivity
Tariffs usually lift import costs first, then retail prices if firms pass through. That can push up headline inflation in the U.S. and EU, complicating central bank paths. Companies may switch suppliers or absorb costs, but both hurt near term. Logistics rerouting adds delays, which risks stockouts and discounting later if demand weakens.
Firms with cross-Atlantic sales face margin squeeze from higher inputs and potential demand slowdown. Watch gross margin and SG&A commentary, plus any hedging disclosures. Guidance cuts can widen credit spreads and weigh on equity multiples. Sensitivity is highest for low-pricing-power names, while staples and utilities may defend earnings better in a tariff cycle.
Final Thoughts
Trade policy is a real market driver today. If U.S.-EU tariffs rise on February 1 and the EU confirms €93B in counter-tariffs, inflation and supply chains will feel it first, with earnings next. For the S&P 500, nearby resistance clusters around 6980–6988, while the 6866 middle band and 6752 lower band outline support. Japanese investors should track the tariff timetable, company guidance on cost pass-through, and exposure to U.S.-EU flows. Maintain a simple playbook: set alert levels around index bands, reassess position sizes using ATR, and prioritize balance sheets with pricing power. Stay nimble, but avoid reactive trades on headlines without confirming the policy text and the final EU list.
FAQs
What are U.S.-EU tariffs and why do they matter now?
U.S.-EU tariffs are taxes on goods traded between the United States and the European Union. They matter now because Washington plans higher rates from February 1 tied to the Greenland tariff dispute, and the EU is preparing up to €93B in counter-tariffs. New levies raise import costs, can lift inflation, disrupt supply chains, and pressure company margins and earnings.
How large is the EU’s potential response?
Reports indicate Brussels is weighing up to €93B in EU counter-tariffs and considering anti-coercion tools. The plan would target selected U.S. goods to deter policy pressure while containing blowback on EU industry. The final scope, timing, and exemptions will determine market impact. Investors should track official texts and legal steps, not only headlines, for confirmation.
How could this affect Japanese stocks and sectors?
For Japan, the main risk channels are demand and costs. Autos, machinery, and semiconductor suppliers tied to both markets could face weaker orders, higher input prices, and logistics delays. That can compress margins and slow cash cycles. Defensives tend to hold up better, but stock selection depends on pricing power, inventory discipline, and exposure to U.S.-EU revenue.
Which S&P 500 levels are important if tariffs escalate?
Traders are watching 6980–6988 as resistance, where the upper Bollinger Band (6980.35), Keltner upper (6988.14), and the 6986.33 year high cluster. On the downside, the middle band near 6866.40 and the lower band at 6752.45 mark support. ATR at 59.05 helps size positions and stops, reflecting typical daily swings near 0.85%.
What dates and documents should I monitor?
Focus on the February 1 effective date for U.S. tariff hikes, any EU Council or Commission releases detailing the €93B counter-tariffs, and company earnings guidance. Official communications and legal notices carry more weight than headlines. Also watch customs notices and product lists, since exclusions and timing can change the market impact meaningfully.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
