empty
14.04.2025 09:45 AM
The Market Wants to, But Hesitates

Do you have a plan, Mr. Donald Trump? Some believe what's happening is masterful diplomacy — they hope that once serious proposals from other countries reach the White House, tariffs will be lifted, GDP will accelerate to 3%, and the S&P 500 will hit new record highs. Others are convinced that import tariffs will drive the U.S. economy into a recession, causing the broad stock index to resume its decline. One thing is clear: investors are tired of uncertainty and hope that clarity regarding the new trade regime will enable them to buy stocks. But not so fast.

Following the announcement of sweeping tariffs, we witnessed ten days of historic turbulence in financial markets. The S&P 500's market cap plunged by $5.8 trillion only to surge again by $4 trillion. The White House alternated between imposing tariffs and announcing postponements. One day, it raised the stakes against Beijing to 145%; the next, it exempted $100 billion worth of popular Chinese electronics from duties — about 23% of total imports from China. Is it any surprise that the VIX surged to its highest levels since March 2020? Is fear still ruling the market?

U.S. Stock Market Volatility Dynamics

This image is no longer relevant

Yes and no. There's an aversion to American assets due to the White House's constantly shifting tone and decisions. At the same time, we're seeing a resurgence of FOMO — the "buy or miss out" strategy. Indeed, the pullback in the S&P 500 has left investors stuck in a "tempted but cautious" state of mind.

This historic volatility has made safe-haven assets the winners: gold, the Japanese yen, and the Swiss franc. At first glance, the euro's strength might seem illogical, but considering that German bonds have become beneficiaries of the White House's erratic decisions — as opposed to U.S. Treasuries — it all starts to make sense.

Asset Performance During Days of Historic Market Volatility

This image is no longer relevant

Investors are confident that Europe and China will stimulate their economies to counteract the negative impact of tariffs and trade wars. Meanwhile, Trump's loosening grip on the European Union has accelerated the outflow of capital from the US to the EU, putting pressure on the S&P 500.

This image is no longer relevant

Furthermore, Wall Street Journal experts have raised the probability of a U.S. recession within the next 12 months from 22% to 45%. The GDP forecast for 2025 has been downgraded from 2% to 0.8%, with some analysts expecting a 2% contraction this year. Others, however, are betting on a swift tariff rollback and GDP expansion to 3%. The first scenario appears more likely — suggesting the stock market is not out of the woods yet. The rough patch is far from over.

From a technical perspective, an inside bar was played out on the S&P 500's daily chart, allowing for the formation of long positions. Now it's time for the second phase of the previously announced strategy: profit-taking on long positions and selling on pullbacks from resistance at 5500 and 5600.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Igor Kovalyov
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

XAU/USD. Analysis and Forecast

Today, gold continues a steady intraday recovery, having retraced a significant portion of the previous day's losses. At the same time, the U.S. dollar is slightly weakening as market participants

Irina Yanina 13:37 2025-07-31 UTC+2

NZD/USD: Analysis and Forecast

On Thursday, the NZD/USD pair attempted to end a five-day losing streak, supported in part by the consolidation of the U.S. dollar. The U.S. Dollar Index, which tracks the greenback

Irina Yanina 13:32 2025-07-31 UTC+2

GBP/USD: Analysis and Forecast

On Thursday, the GBP/USD pair drew market attention by partially reversing Wednesday's downward movement and hitting its lowest level since May 13. Currently, spot prices are trading just above

Irina Yanina 13:28 2025-07-31 UTC+2

The Fed Chairman has once again shown resilience

Yesterday, Federal Reserve Chair Jerome Powell resisted pressure from the White House, stating that the central bank must remain vigilant due to the risk of inflation. The Federal Open Market

Jakub Novak 13:10 2025-07-31 UTC+2

US GDP turned out to be better than economists' forecasts, strengthening the dollar's position

Yesterday, the U.S. dollar strengthened following reports that second-quarter GDP data exceeded economists' expectations. While U.S. economic growth slowed in the first half of the year as consumers cut back

Jakub Novak 12:21 2025-07-31 UTC+2

Fed Meeting Results and Another Victory for Donald Trump (Potential Renewed EUR/USD Decline and #NDX Rally)

On Wednesday, as expected, the Federal Reserve left all parameters of its monetary policy unchanged, but this did not disappoint market participants. On the one hand, this was anticipated;

Pati Gani 09:59 2025-07-31 UTC+2

The Market Took Wishful Thinking for Reality

"I heard the Fed is going to cut rates in September." Once again, Donald Trump is presenting wishful thinking as fact. The futures market, on the contrary, reduced the probability

Marek Petkovich 09:09 2025-07-31 UTC+2

What to Pay Attention to on July 31? A Breakdown of Fundamental Events for Beginners

A relatively large number of macroeconomic reports are scheduled for Thursday, but only a few of them are of significant importance. Unemployment rates will be published in Germany

Paolo Greco 07:40 2025-07-31 UTC+2

GBP/USD Overview – July 31: The U.S. Inflation Spiral Begins to Unwind

On Wednesday, the GBP/USD currency pair made only a minimal upward retracement, and for most of the day, trading was dull and calm. As we predicted on Wednesday morning

Paolo Greco 04:29 2025-07-31 UTC+2

EUR/USD Overview – July 31: Is the EU–U.S. Agreement a Fiction?

The EUR/USD currency pair maintained its bearish bias on Wednesday. We will discuss all the day's macroeconomic reports in our other articles; this article focuses on the key event

Paolo Greco 04:29 2025-07-31 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.