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
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
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

What to Pay Attention to on April 24? A Breakdown of Fundamental Events for Beginners

Few macroeconomic events are scheduled for Thursday, but yesterday's developments showed that the market continues to ignore the majority of data releases. Only a handful of reports are lucky enough

Paolo Greco 06:05 2025-04-24 UTC+2

GBP/USD Overview – April 24: Didn't work out? So be it...

On Wednesday, the GBP/USD currency pair managed to avoid a substantial decline, although the day before, it seemed that a downtrend was finally beginning. However, the market quickly bounced back

Paolo Greco 03:16 2025-04-24 UTC+2

EUR/USD Overview – April 24: Is it really about Powell?

The EUR/USD currency pair refrained from continuing its decline on Wednesday. As the saying goes, "Everything in moderation." The dollar gained around 200 pips on Tuesday, which shouldn't scare anyone

Paolo Greco 03:16 2025-04-24 UTC+2

The Kiwi Has a Decent Chance to Continue Rising

Inflation in New Zealand in Q1 came in slightly above expectations, rising from 2.2% to 2.5% year-over-year. This was mainly due to the goods sector, while core inflation is slowing

Kuvat Raharjo 00:59 2025-04-24 UTC+2

The Pound Holds On, but a Reversal Is Near

Inflationary pressure in the UK is gradually easing but remains elevated. In March, the core index fell from 3.5% to 3.4% year-over-year, while the headline CPI dropped from 2.8%

Kuvat Raharjo 00:59 2025-04-24 UTC+2

The Euro Takes a Hit Below the Belt

There will be no winners in trade wars. The U.S. will suffer due to a loss of trust in the dollar and other American assets, while Europe will suffer from

Marek Petkovich 00:59 2025-04-24 UTC+2

GBP/JPY. Analysis and Forecast

The GBP/JPY pair is retreating from the psychological level of 190.00, or a two-week high reached earlier today. Following disappointing UK PMI data, selling pressure has intensified, pulling spot prices

Irina Yanina 18:16 2025-04-23 UTC+2

Market walks through minefield

If the market can rally this much on hints from Treasury Secretary Scott Bessent about de-escalation in the trade conflict with China, imagine how high the S&P 500 could jump

Marek Petkovich 12:35 2025-04-23 UTC+2

The Likelihood of a Euro Reversal to the South Is Increasing

As expected, the ECB cut all key interest rates by a quarter-point, bringing the deposit rate down to 2.25%. At this meeting, no new staff projections were released, and given

Kuvat Raharjo 12:01 2025-04-23 UTC+2

Markets Await a Massive Rally if the U.S. Starts Real Negotiations with China (There is a likelihood of continued growth in #NDX and Ethereum)

A new wave of euphoria has swept through the markets. Many believe it's not a coincidence: take everything away from a person and then provide them with even the smallest

Pati Gani 09:03 2025-04-23 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.