US stocks tick up amid tech momentum and trade tensions

David Morrison

SENIOR MARKET ANALYST

04 June 2025

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US stock index futures continued to grind higher in early trade on Wednesday. While the US majors have posted relatively modest daily gains so far this week, they have all contributed to a decent start to the month.

Both the NASDAQ and S&P 500 are creeping back up to within sight of February’s all-time highs.

US 500 chart showing price advancing towards overbought conditions

Source: TN Trader

Meanwhile, the blue-chip Dow and the mid-cap Russell 2000 continue to lag. The disparity between the two pairs of indices demonstrates that, once again, it is tech which is at the vanguard of the move higher.

This indicates investor conviction that highly innovative tech companies should be relatively immune to President Trump’s ever-changing tariffs. In addition, many investors continue to look past the current trade confusion, convinced that it will all turn out fine in the end.

And as things stand, nothing much should happen between now and July to upset markets, as it is next month when the high reciprocal tariffs would kick in, assuming the absence of any bilateral trade deals, while there is also around six weeks until the start of the second quarter earnings season.

In the meantime, relatively rangebound markets, despite the gentle drift upwards, have helped to bring all the major indices back down from overbought levels. If this continues, that could help to reset the MACDs at lower levels and thereby set the stage for another move higher – that’s the bullish argument. But there’s a lot of complacency in that outlook and markets don’t exist in a vacuum.

Alternatively, US stock indices may require a more significant downside correction to help them pull back from overbought levels. But that may require a catalyst. Could Friday’s Non-Farm Payrolls, along with a disappointing outcome from Trump’s trade talks with China’s Premier Xi, prove to be the trigger?


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