Market optimism, fueled by Donald Trump's active manipulation of the tariff narrative, was short-lived. Traders remain focused on the escalating tensions between the U.S. and China following the U.S. Department of Commerce's decision to launch an investigation into imports of semiconductors and pharmaceutical products, increasing the likelihood of higher tariffs.

As I've previously stated, the U.S. president continues to push his agenda for America's economic revival, which means the core confrontation between Washington and Beijing will persist until trade agreements are reached. Until then, the veil of uncertainty over financial markets will remain — with all the accompanying negative consequences.

Today's Key Focus for Traders

Investors will be closely watching important economic data releases in the eurozone — namely, the consumer inflation report — as well as the U.S. core retail sales index and volume figures. Additionally, markets will be closely monitoring the scheduled speech by Federal Reserve Chair Jerome Powell. Markets are anticipating his views on the outlook for interest rates in light of the noticeable drop in consumer inflation last month. Should he indicate the Fed's readiness to continue cutting rates if inflation remains subdued, this would be a bearish signal for the dollar on the Forex market and a supportive factor for equities.

As for the euro, the consensus forecast suggests the Consumer Price Index (CPI) will decline year-over-year from 2.3% to 2.2% in March, while monthly growth is expected to rise from February's 0.4% to 0.6%. I believe the main bullish factor — the €800 billion spending plan from the European Commission — has already been priced in. Meanwhile, the ongoing recession and full-scale economic crisis are unlikely to support rising demand for the euro.

The only remaining support for the euro against the dollar may come from a potential rate cut by the Fed. However, that remains uncertain due to Trump's geopolitical and economic policies, which could end up supporting inflation. While the president has been maneuvering to contain inflation, whether he will succeed remains to be seen.

What to Expect in the Markets Today

Markets are on edge, as the Fed faces the complex task of supporting economic growth amid the risk of persistently high inflation caused by tariffs. Adding to the uncertainty, Trump has ordered a new review of tariff plans on all critical imported raw materials — many of which are sourced from China. This move has further clouded trade prospects, with no signs yet of renewed negotiations between Washington and Beijing.

Given this, I expect stock indices in the U.S. to decline today, as already indicated by futures. A fresh wave of negativity is pushing Treasury yields lower and weakening the dollar against a basket of major currencies on the Forex market. Cryptocurrency tokens may also come under pressure — any increase in uncertainty about the future dampens demand for these digital assets. Meanwhile, gold, the ultimate safe-haven asset, could continue its upward momentum toward new historical highs.

Daily Forecast

#NDX The NASDAQ 100 futures CFD is trading below the support level of 18,690.50 amid the U.S.-China trade crisis. Today's decline is likely to continue. I suggest selling the contract, with a possible entry point at 18,355.70, targeting a decline toward 17,750.00.

Litecoin The token is trading above 74.89. A deterioration in market sentiment would justify further price decline toward the 71.00 level. A potential sell trigger could be a drop below 74.47.