empty
14.05.2025 09:32 AM
The Market Is Changing the Rules of the Game

Don't go against the crowd. According to Goldman Sachs and the Federal Reserve, individual investors held $35 trillion worth of U.S. stocks at the end of 2024, equivalent to 38% of the entire market. So when U.S. stock indices dipped into bear territory in early April, and the S&P 500 lost $6.6 trillion in capitalization, they did what they had been taught over the past 15 years: they bought the dip. The 17% rally in the stock market is driven by the crowd, following guidance from the White House.

U.S. Stock Index Dynamics

This image is no longer relevant

S&P 500 swings like the ones we saw in April–May usually only happen during crises. This time, the crisis was artificially manufactured. Massive White House tariffs—the highest since the early 20th century—fueled investor fears of an impending U.S. recession. Now, JPMorgan has abandoned its recession forecast and raised its GDP outlook. JPMorgan, along with Goldman Sachs and Barclays, is now postponing expectations of the Fed resuming monetary easing from July–September to December. Would they be doing that if they believed the U.S. economy was freezing up?

Greed has returned to the stock market. Yardeni Research claims investors have the upper hand over Donald Trump, forcing the president to dance to their tune, and has raised its S&P 500 target from 6000 to 6500 by year-end. Previously, the firm had twice downgraded its forecast. It now says it can change its opinion as often as the man in the White House does. Not to be outdone, Goldman Sachs raised its S&P 500 forecast to 6100 by the end of 2025, citing lower tariffs and a stronger economy.

Reports that major crypto exchange Coinbase would be added to the S&P 500—boosting its stock—along with China's resumption of Boeing aircraft purchases and a statement from Donald Trump that Saudi Arabia plans to invest a colossal $1 trillion in the U.S. economy added fuel to the rally. After the U.S.-China trade de-escalation, the broad stock index needed a new growth driver, and it got one.

U.S. Inflation Dynamics

This image is no longer relevant

This image is no longer relevant

Despite slowing U.S. inflation in April and renewed calls from the White House for the Fed to cut interest rates, the S&P 500 has approached its record high. The gap is a modest 4.4%, and a crowd fueled by success dreams of a new all-time high. However, experts are raising concerns: a market with constantly changing rules is extremely dangerous. Much of the positive news is already priced into equities. The moment to "sell the fact" is quickly approaching.

Technically, the daily chart for the S&P 500 shows a test of major resistance at 5900. A pullback allowed traders to lock in profits on previously opened long positions, reverse, and go short. A successful retest of this level would be grounds for new purchases of the broad stock index.

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

Strong Employment Report Supports the Canadian Dollar

Net employment change in May amounted to +8.8 thousand jobs, exceeding April's growth and presenting very strong data, especially against expectations — a loss of about 15 thousand jobs

Kuvat Raharjo 15:05 2025-06-09 UTC+2

AUD/USD. Analysis and Forecast

At the beginning of the new trading week, the AUD/USD pair is showing steady upward momentum, recovering from a slight pullback and once again approaching the highs seen in November

Irina Yanina 14:51 2025-06-09 UTC+2

USD/JPY. Analysis and Forecast

The USD/JPY pair is showing moderate weakness on Monday, dropping toward the psychological level of 144.00. The decline is driven by a combination of factors, including the strengthening

Irina Yanina 14:05 2025-06-09 UTC+2

WTI - West Texas Intermediate. Analysis and Forecast

At the start of the new week, prices for West Texas Intermediate (WTI) crude oil are attempting to stay near Friday's highs. Senior U.S. officials, including Treasury Secretary Scott Bessent

Irina Yanina 14:02 2025-06-09 UTC+2

Old Donald the Fighter Seems to Have Broken Down (there is a likelihood of continued growth in CFD contracts #NDX and #SPX)

Despite all the hardships, uncertainty, and overall market tension, stock indices persistently climb higher. Investors believe that Donald Trump will have to back down and retreat in his confrontation with

Pati Gani 10:06 2025-06-09 UTC+2

China and the U.S. Take a Serious Step Toward Each Other

The euro and the pound have recovered from Friday's losses, gradually resuming their upward movement. This is supported by the resumption of U.S.-China negotiations today, aiming to further ease tensions

Jakub Novak 09:21 2025-06-09 UTC+2

What to Pay Attention to on June 9? A Breakdown of Fundamental Events for Beginners

No macroeconomic reports are scheduled for Monday. Thus, traders will have nothing to react to during the day. There is a high probability of flat or weak movements unless Donald

Paolo Greco 05:54 2025-06-09 UTC+2

GBP/USD Overview – June 9: Nonfarms Did Not Disappoint

The GBP/USD currency pair also traded lower on Friday and even settled slightly below the moving average line. While we constantly say there are no reasons for the pound

Paolo Greco 04:03 2025-06-09 UTC+2

EUR/USD Overview – June 9: A New Episode of the "American Circus"

The EUR/USD currency pair traded with a slight decline on Friday, which was driven by decent macroeconomic data from the U.S. However, reports from the Eurozone also turned out quite

Paolo Greco 04:03 2025-06-09 UTC+2

EUR/USD. Weekly Preview. Inflation and More Inflation

The upcoming trading week will revolve around American inflation. In the United States, data will be published on the growth of the Consumer Price Index (CPI), the Producer Price Index

Irina Manzenko 02:39 2025-06-09 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.