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
Summary
Urgency
Analytic
Igor Kovalyov
Start trade
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

AUD/JPY. Analysis and Forecast

On Wednesday, the AUD/JPY pair is attracting buyers, even though the Japanese yen remains relatively weak due to domestic political uncertainty. Moreover, according to polls, Japan's ruling coalition—the Liberal Democratic

Irina Yanina 13:04 2025-07-16 UTC+2

GBP/USD: Analysis and Forecast

Today, the GBP/USD pair is attempting to regain positive momentum and rise above the key psychological level of 1.3400, aiming to break a multi-day losing streak. However, spot prices remain

Irina Yanina 12:51 2025-07-16 UTC+2

The EU Needs a Deal with the US—But Not at Any Cost

The euro continues to weaken against the US dollar, even though some European politicians are no longer as soft in their statements as they once were. In an interview, Bundesbank

Jakub Novak 12:46 2025-07-16 UTC+2

Trump Prepares Tariffs on Semiconductors and Pharmaceuticals

Yesterday, the U.S. stock market declined, while the U.S. dollar strengthened further following President Donald Trump's announcement that he plans to impose tariffs on pharmaceutical products and semiconductors

Jakub Novak 12:33 2025-07-16 UTC+2

Trump's Policy Supports the Dollar (EUR/USD and GBP/USD May Resume Their Decline)

The U.S. consumer inflation report released yesterday showed that Donald Trump's policy to "make America great again" is, for now, mainly making life in America more expensive. According

Pati Gani 09:51 2025-07-16 UTC+2

The Market Failed to Hold Its Peak

Markets have started selling the news. Combined with the impact of tariffs showing up in U.S. inflation data, this prevented the S&P 500 from holding at its record high

Marek Petkovich 09:51 2025-07-16 UTC+2

U.S. Inflation Puts Pressure on the Fed

The U.S. dollar rose yesterday against a number of risk assets, despite core inflation in June rising less than expected. Inflation has been increasing for the fifth consecutive month

Jakub Novak 09:24 2025-07-16 UTC+2

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

Several macroeconomic releases are scheduled for Wednesday. The most important report is the UK inflation data, which will be published within the hour. While we do not believe this report

Paolo Greco 07:30 2025-07-16 UTC+2

GBP/USD Overview – July 16. "The Devil Is Not as Scary as He Is Painted"

The GBP/USD currency pair has been in a downtrend for the past few weeks, raising some questions. Yes, if we switch to the daily (24-hour) timeframe, the current strong downward

Paolo Greco 04:22 2025-07-16 UTC+2

EUR/USD Overview – July 16. U.S. Inflation Has No Effect

The EUR/USD currency pair continued to trade calmly throughout Tuesday. Of course, when the U.S. inflation report was released, there was an emotional spike in the market. However, overall, volatility

Paolo Greco 04:22 2025-07-16 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.