Last Friday, US stock indices closed with moderate gains. The S&P 500 rose by 1.56%, and the Nasdaq 100 recovered by 2.21%. The industrial Dow Jones added 1.29%.

Last Friday, US stock indices closed with moderate gains. The S&P 500 rose by 1.56%, and the Nasdaq 100 recovered by 2.21%. The industrial Dow Jones added 1.29%.

However, today futures contracts on the S&P 500 index dropped by 0.7%, and Nasdaq 100 futures fell by 1%. This occurred after China retaliated against the US in the shipping sector by imposing restrictions on American divisions of Hanwha Ocean Co. Asian equities declined by 1.3% to their lowest level in more than two weeks. Japan's Nikkei 225 index dropped by 3%, also due to political turmoil. Cryptocurrencies returned to losses as well.

The yen recovered prior losses and strengthened against the dollar. Gold plunged in the second half of the day, losing most of its earlier gains after silver, which had reached a historic high during morning trading, saw a sharp sell-off. US Treasuries rose, with the 10-year yield adding around 4.03%.

Although US stocks recouped part of Friday's losses stemming from renewed US-China tensions, suggesting a return of investor willingness to buy the dip, China's latest restriction on shipping has raised concerns that the trade dispute may escalate once again. This factor, combined with a likely pause in the Federal Reserve's rate-cut cycle and ongoing fears over a slowdown in global economic growth, continues to exert pressure on risk assets, including commodity currencies. Investors, who had previously been willing to overlook political risks, are now reassessing the potential long-term impact of such developments with greater caution.

Shipping restrictions imposed by China serve as a reminder that trade conflicts can take various forms and have a direct impact on supply chains and overall economic activity. It was reported that China introduced restrictions on five US subsidiaries of Hanwha Ocean in response to American investigations into China's maritime, logistics, and shipbuilding sectors. A domino effect cannot be ruled out, where actions by one nation provoke retaliatory measures from others, potentially leading to further escalation of the conflict.

Earlier, US Treasury Secretary Scott Bessent stated that he still expects a meeting between Presidents Donald Trump and Xi Jinping. However, he warned that the US retains all options for retaliation in response to China's tightening of rare earth export controls. China has called for continued negotiations to resolve outstanding issues.

Today, Chinese authorities stated that export control measures regarding rare earth elements and related products do not amount to an outright ban, and applications that meet the requirements will continue to be approved.

As for the technical picture of the S&P 500, the main task for buyers today will be to break through the nearest resistance level of $6,616. This would support further upside and open the way for a move toward the next level at $6,630. No less of a priority for bulls will be maintaining control over the $6,638 mark, which would strengthen buyers' positioning. In case of a move to the downside amid decreased risk appetite, buyers must step in around the $6,603 area. A break below this level would quickly push the instrument back to $6,590 and open the way toward $6,517.