empty
01.04.2025 09:13 AM
US stock market: bad news fully priced in

The S&P 500 had its worst quarter in three years. Investors are shifting capital from North America to Europe. Once-booming US tech stocks have collapsed. Major banks and respected institutions are raising the odds of a recession for the American economy. That's a lot of bad news for a broad stock index, isn't it? However, buying the dip towards the lower boundary of the sideways range at 5,500–5,790 has borne fruit — just in time for America's "Liberation Day".

Performance of US stock indices

This image is no longer relevant

Donald Trump's policies have caused turmoil not only in financial markets but also among the general public. According to the latest Associated Press poll, nearly 60% of Americans disapprove of the president's protectionist stance, and 58% are dissatisfied with his overall handling of the US economy. The market sell-off reflects investor skepticism, but the Republican leader remains undeterred. He insists the country must endure short-term pain to reclaim a golden era for America.

That "Liberation Day" will come on April 2, when the White House is set to announce new tariffs. According to Wall Street Journal sources, the president is weighing two options: blanket 20% import tariffs or tailored, reciprocal tariffs. The former could send another shock through financial markets, while the latter might calm nerves.

Following JP Morgan and Moody's Analytics, Goldman Sachs has raised the probability of a US recession from 20% to 35%. Yet investors have found new reasons for optimism. After a massive sell-off in tech stocks, forward P/E ratios are now approaching historical averages. In other words, stocks are no longer overvalued, making them more attractive.

US tech sector P/E trends

This image is no longer relevant

The White House's new tariffs could also slow capital outflows from North America to Europe. A full-blown trade war would likely hit the EU harder due to its large trade surplus with the United States. Moreover, part of the capital shift was driven by a 4.6% gain in the euro against the dollar in the first quarter. As a result, European investors lost about 13% on US-listed assets.

This image is no longer relevant

According to Wells Fargo, the dollar's January-March slide was temporary. Looking ahead, tariffs and trade tensions could boost the greenback by 1.5% to 11%, with maximum gains expected if America's trade partners avoid a full-scale retaliatory response.

From a technical standpoint, the S&P 500 has bounced off the lower boundary of the previously established 5,500-5,790 consolidation range. Long positions opened at the 5,500 level appear to be worth holding. A break above the resistance levels at 5,625 (pivot) and 5,670 (fair value) would allow for additional long positions.

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

GBP/USD Overview. September 8. Is the Pound's Road to the Moon Open?

On Friday, the GBP/USD pair also posted a strong gain, fully recovering from Tuesday's decline "for unknown reasons." The reason, of course, became clear the next day: the market

Paolo Greco 03:47 2025-09-08 UTC+2

EUR/USD Overview. September 8. Will the "Great Economic Future" Arrive Soon?

On Friday, the EUR/USD currency pair posted a relatively strong upward move, triggered, of course, by US labor market and unemployment data. A month earlier, Donald Trump lashed

Paolo Greco 03:47 2025-09-08 UTC+2

Trading Recommendations and Analysis of EUR/USD Deals for September 8. Nonfarm Payrolls and Unemployment Failure

On Friday, the GBP/USD currency pair quite logically surged by more than 100 pips, as the labor market and unemployment reports once again proved to be disappointing

Paolo Greco 03:47 2025-09-08 UTC+2

What Are "Trump-Style" Trade Deals?

To date, Donald Trump has signed several trade agreements and at the same time imposed tariffs—by conservative estimates—against half the countries in the world. The most notable and significant

Chin Zhao 00:45 2025-09-08 UTC+2

EUR/USD. Weekly Preview. US CPI/PPI and ECB September Meeting

The coming trading week promises to be volatile. The US will publish key inflation growth data, and the European Central Bank will hold its regular September meeting, determining the future

Irina Manzenko 00:45 2025-09-08 UTC+2

US Dollar: Weekly Preview

The upcoming US news background will determine the fate of both EUR/USD and GBP/USD. As usual, there will be more news out of America than from the UK and Eurozone

Chin Zhao 00:45 2025-09-08 UTC+2

British Pound: Weekly Preview

The British pound remains in the same position as the euro. At this point, nothing depends on the pound itself, on British statistical releases, or even on the actions

Chin Zhao 00:45 2025-09-08 UTC+2

Euro Currency: Weekly Preview

The current wave structure for EUR/USD remains straightforward, despite horizontal movement over the past few weeks. The charts show that, while the wave pattern has become slightly more complex

Chin Zhao 00:45 2025-09-08 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair continues to decline from the weekly high near 1.3850. Current quotes appear to have ended a four-day period of gains and are now trading slightly below

Irina Yanina 12:48 2025-09-05 UTC+2

XAU/USD. Analysis and Forecast

Gold has been unable to benefit from its modest overnight gains, as traders prefer to refrain from opening new positions ahead of the release of the monthly U.S. employment data

Irina Yanina 12:07 2025-09-05 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.