empty
13.05.2025 09:20 AM
The Market Hits the Jackpot!

Bingo! No one could have dreamed of such an outcome from the U.S.-China meeting—not even in their most optimistic fantasies. The reduction of U.S. import tariffs from 145% to 30%, and Chinese tariffs from 125% to 10%, sparked a full-on celebration among S&P 500 bulls. The broad equity index posted its best performance in a month, came within arm's reach of breaking into the green for 2025, and is now just 5.6% away from February's record close. Are new all-time highs just around the corner?

Goldman Sachs thinks so. The bank raised its 12-month forecast for the broad index from 6,200 to 6,500, claiming the worst is behind us. There will be no recession in the U.S., equities will climb, and the recent dark streak is becoming a distant memory. Indeed, the deal with China was the most crucial for America. As a result, the average U.S. import tariff has fallen to 12%, not high enough to push the economy off a cliff.

U.S. Tariff Revenue Dynamics

This image is no longer relevant

Everything is going according to Donald Trump's plan. Equity indices are rising, and in April alone, the U.S. collected a record $16.3 billion in tariff revenue. Since the start of the fiscal year in October, tariffs have added $63.3 billion to the federal budget—$15.4 billion more than during the same period in 2023/2024.

Fear has nearly disappeared from financial markets, as shown by the VIX volatility index falling to its lowest level since March and the put-call ratio for the S&P 500 dropping to its lowest since February.

VIX Index Dynamics

This image is no longer relevant

Everything American is back in style: stocks, bonds, the dollar, and the assets of the Magnificent Seven are being purchased rapidly. Investors seemingly forget that tariffs have already taken a toll on the U.S. economy. Bloomberg analysts expect the labor market to cool by May and inflation to accelerate by June. The risk of stagflation still looms, making the key question: How much will the Fed cut rates?

Following the U.S.-China agreement, futures markets reduced their expectations for monetary easing from 75 basis points to 56 bps—now pricing in two rate cuts in 2025, down from four anticipated in late April. The timing of the policy easing cycle has also shifted from July to September.

This image is no longer relevant

My view: The boost from trade de-escalation has likely been priced in. The S&P 500 needs new drivers to continue its rally and reach fresh record highs. One potential catalyst? A renewed round of fiscal stimulus, such as tax cuts. Until then, the index may be headed for a consolidation phase.

On the daily chart, the index remains in an uptrend, continuing the recovery of its long-term bullish trajectory. Long positions initiated at 5655 and 5695 were timely and profitable—their future hinges on a test of resistance at 5900. A breakout would justify adding to longs, while a rejection could signal a reversal and open the door for short positions.

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

The Pound Ignores Weak Data and Persistently Tries to Continue Rising

The macroeconomic data from the UK published last week looks frankly weak—everything is in the red zone, meaning worse than expected. Nevertheless, the pound continues to climb upward regardless

Kuvat Raharjo 19:36 2025-06-16 UTC+2

CFTC Report: The Dollar Is Being Sold Off Again. Awaiting New Revelations from Trump

Five weeks ago, the total short position on the U.S. dollar against major currencies stopped increasing, which gave reason to believe the dollar might begin an offensive in the currency

Kuvat Raharjo 12:14 2025-06-16 UTC+2

GBP/USD. Analysis and Forecast

Today, the GBP/USD pair is attempting to regain positive momentum while remaining on the defensive. Traders prefer to wait for the release of key data before opening directional positions

Irina Yanina 12:10 2025-06-16 UTC+2

EUR/USD. Analysis and Forecast

Today, the EUR/USD pair is attempting to regain positive momentum, approaching the psychological level of 1.600 and price levels last seen in 2021. Traders are eagerly awaiting the important political

Irina Yanina 12:08 2025-06-16 UTC+2

The Israel-Iran Confrontation. Fed Meeting. What's Next? (I expect further decline in USD/CAD and a local pullback in gold before a new wave of growth)

Israel and Iran are exchanging missile strikes, but it seems markets are trying to play their own game, assuming that this conflict will not cross the nuclear threshold

Pati Gani 10:51 2025-06-16 UTC+2

EUR/USD: War Is No Ally to the Greenback

At the start of the new trading week, the EUR/USD pair stayed within the 1.15 range and is even trying to approach the resistance level of 1.1600 despite the ongoing

Irina Manzenko 10:32 2025-06-16 UTC+2

What to Pay Attention to on June 16? A Breakdown of Fundamental Events for Beginners

No macroeconomic reports are scheduled for Monday, but the market does not lack news. This week, Donald Trump announced his intention to raise all import tariffs, as none

Paolo Greco 06:46 2025-06-16 UTC+2

GBP/USD Overview – June 16: How Trump Is Undermining the Dollar

The GBP/USD currency pair will remain under the influence of geopolitics and politics in the new week. Essentially, we've been saying the same thing every day for the past four

Paolo Greco 04:54 2025-06-16 UTC+2

EUR/USD Overview – June 16: The Israel-Iran Conflict Changes Nothing

The EUR/USD currency pair moved sharply back and forth throughout Friday. The pair traded with high volatility for two consecutive days, and there is a clear and logical explanation

Paolo Greco 04:54 2025-06-16 UTC+2

EUR/USD. Weekly Preview. Focus on the Middle East and the Federal Reserve

The final trading day of last week ended on an uncertain note. Reacting to Middle East developments, the EUR/USD pair sharply declined on Friday, retreating from the multi-year price high

Irina Manzenko 01:30 2025-06-16 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.