empty
22.05.2025 09:49 AM
Changes in the U.S. Tax System May Exert Localized Pressure on Market Demand (there is a likelihood of a decline in #SPX and gold prices)

The chaos and instability caused by Donald Trump, both in the U.S. and around the world, have become a regular occurrence. However, they still contribute to significant market volatility, and this situation shows no signs of improvement.

The U.S. stock market fell sharply on Wednesday amid a surge in Treasury yields and concerns over changes in fiscal policy proposed by the U.S. president. These developments significantly affected investor sentiment and halted the growth of domestic equity indices.

Long-term bond yields spiked after a weak auction of $16 billion in 20-year Treasury bonds, with the yield on 30-year Treasuries rising to around 5% — the highest since 2023. The benchmark 10-year government bond yield reached a local April high. All of this unfolded in the context of a proposed tax and spending bill that could further widen the federal budget deficit.

Naturally, these developments and movements in the bond and equity markets had a negative impact on the dollar, which, according to its index, fell below the 100-point mark and continued to decline almost vertically during the morning session. Japanese Finance Minister Kato stated that he had not yet discussed exchange rates with U.S. Treasury Secretary Bessent during the G7 meeting in Canada. Meanwhile, reports have emerged that the U.S. is pressuring South Korea to introduce measures to strengthen the won. These reports indicate that the U.S. is interested in weakening its national currency to stimulate the international trade of American companies.

The only beneficiaries of this market turmoil were gold and cryptocurrencies, which have risen noticeably amid heightened volatility and general uncertainty over the outlook.

The internal disarray within the Trump administration and the desire to preserve everything without making any sacrifices will only worsen the situation in America and the markets. Under such conditions, the Federal Reserve is unlikely to decide on a rate cut in the near future but will continue to feed the markets with hope, which may partially contain a potential collapse.

What can be expected in the markets today?

The U.S. stock market will likely continue to decline due to the ambiguous situation surrounding the new tax law. The dollar may also keep falling in the Forex market under the pressure of domestic turmoil. This generally negative picture may pause gold price growth and reduce local demand for cryptocurrencies.

This image is no longer relevant

This image is no longer relevant

Daily Forecast

Gold

Gold prices are trading in a short-term downtrend and may locally rise to its resistance line at 3358.50. Failure to break above this level could serve as a basis for a price reversal and a renewed decline toward 3200.00. A potential level for selling the pair could be 3349.51 or a simple market sell.

#SPX

The CFD contract on the S&P 500 futures remains under pressure and is trading near 5854.45. Continued negative market sentiment may lead to a renewed decline toward 5756.40. A potential level for selling the pair could be 5830.23.

Pati Gani,
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

Market fears nothing

The S&P 500 reached another all-time high, with rotation being the hallmark of the US equity market. Investors are aggressively buying up stocks that underperformed in the first half

Marek Petkovich 10:50 2025-07-11 UTC+2

What to Watch for on July 11th? A Fundamental Overview for Beginners

There are very few macroeconomic publications scheduled for Friday, but the volume is still greater than on any previous day this week. The UK will release GDP and industrial production

Paolo Greco 08:50 2025-07-11 UTC+2

GBP/USD Overview on July 11, 2025

The GBP/USD currency pair failed to consolidate above the moving average on Thursday, so the correction continues for now. Throughout Thursday, the GBP/USD pair was unable to hold above

Paolo Greco 07:15 2025-07-11 UTC+2

EUR/USD Overview on July 11, 2025

The EUR/USD currency pair spent Thursday calmly drifting lower. We continue to wait for the current correction to end and for the uptrend to resume. To be fair, this correction

Paolo Greco 07:08 2025-07-11 UTC+2

XAU/USD. Analysis and Forecast

Gold prices are maintaining positive momentum for the second consecutive day. Ongoing uncertainty surrounding U.S. President Donald Trump's trade policy and its impact on the global economy continues to weigh

Irina Yanina 19:24 2025-07-10 UTC+2

USD/CHF. Analysis and Forecast

Today, the USD/CHF pair retraced part of its decline from a new weekly low recorded during the Asian session and has temporarily paused its downward movement, stopping short

Irina Yanina 12:26 2025-07-10 UTC+2

Market dupes sellers

The split within the Federal Reserve, NVIDIA's successes, and a successful auction of 10-year US Treasury bonds allowed the S&P 500 to ignore the tariff chaos. Donald Trump announced tariffs

Marek Petkovich 12:02 2025-07-10 UTC+2

What to Watch on July 10th: Fundamental Event Overview for Beginners

Macroeconomic Report Analysis: There are very few macroeconomic publications scheduled for Thursday, and none of them are expected to be significant. So what could traders focus on today? The second

Paolo Greco 09:07 2025-07-10 UTC+2

GBP/USD Overview on July 10, 2025

On Wednesday, the GBP/USD currency pair maintained its downward movement, which is corrective in nature and could end at any moment. The price remained below the moving average line

Paolo Greco 07:26 2025-07-10 UTC+2

EUR/USD Overview on July 10, 2025

The EUR/USD currency pair continued to trade very calmly on Wednesday. The pair maintained a slight downward bias, as we've noted in all of our recent articles. However, the current

Paolo Greco 07:16 2025-07-10 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.