Top.Mail.Ru
empty
18.04.2025 09:16 AM
The Market Taken Hostage

Will the White House cross the Rubicon by initiating the dismissal of Jerome Powell from his position as Chair of the Federal Reserve? That would deal another blow to financial markets, but for now, the S&P 500 has reacted calmly to the barrage of criticism from Donald Trump toward the central bank's head. Trump claims he never liked Powell and accuses him of playing political games by refusing to cut interest rates. Meanwhile, everything is falling—oil and gasoline—except the cost of borrowing in the U.S. remains high. Is it time to change horses midstream?

The S&P 500 has declined in seven of the past nine weeks, reacting sharply to developments surrounding the White House's tariff policies. Meanwhile, the U.S. administration is doing everything possible to create an optimistic backdrop. Trump and Treasury Secretary Scott Bessent emphasize progress in talks with Japan; the president says he no longer wants to raise tariffs against China, and a deal with the European Union is "almost in the bag." According to him, the U.S. has everything Europe wants, so a trade agreement is inevitable.

Weekly Performance of the S&P 500

This image is no longer relevant

How much higher can it go? The official tariff on Chinese imports stands at 145%, but levies reach up to 245% for some goods. For instance, after a 25% tariff on electric vehicles imposed during Trump's first term, Joe Biden raised it to 100%, and now the Republican contender has added another 145%. He urges Beijing to return to negotiations, arguing that the longer China delays, the more detrimental it will be for bilateral trade.

It's clear that the S&P 500's decline and temporary dip into "bear market" territory made an impression on the White House occupant. The broad equity index still has the potential to rise, as updated forecasts from Bloomberg analysts indicate.

Expert Forecasts for the S&P 500

This image is no longer relevant

There's both bad and good news. The median forecast for the end of 2025 has been revised from 6,539 to 6,047, indicating a 7.5% decline. Even during the height of the COVID-19 pandemic and the ensuing recession, analysts only trimmed their projections by 5%. This signals that we're witnessing tectonic shifts in the market. The good news is that if the consensus forecast materializes, the S&P 500 could climb by about 14% from current levels.

This image is no longer relevant

I believe the market will continue to be affected by increased volatility. Until the situation with White House tariffs and their impact on the U.S. economy becomes clearer, investors will lack enthusiasm for buying American stocks, especially now that New York Fed President John Williams has echoed Jerome Powell's stance on keeping the federal funds rate elevated.

Technically, the daily chart of the S&P 500 has formed an inside bar. This provides grounds to place pending buy orders from 5,335 and sell orders from the lower boundary of 5,215. If triggered, the latter could present an opportunity to build on previously opened 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

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

Bitcoin Gripped by Fear

Charity begins at home. As it turns out, the 47th President of the United States' loyalty to the crypto industry is rooted in personal interests. Donald Trump and his family

Marek Petkovich 01:29 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.