empty
11.06.2025 09:18 AM
The Market Approaches Its Rubicon

The devil is in the details—and the U.S. and China haven't provided investors with those details regarding their newly reached deal. This lack of transparency risks cutting off the momentum of S&P 500 bulls. The broad equity index has climbed in six of the last seven trading sessions, fueled by optimistic rumors about the U.S.-China trade talks in London—rumors broadly disseminated by White House officials. Treasury Secretary Scott Bessent described the dialogue as constructive, while Commerce Secretary Howard Latnick claimed the talks were going "very, very well."

According to TS Lombard, markets are stuck in a reflexive cycle in which their calmness prompts U.S. policymakers to find new ways to stir up investors. Indeed, U.S. macroeconomic data has been mixed, Treasury yields have stabilized, and the likelihood of a renewed monetary easing cycle from the Federal Reserve is declining. Derivatives are now pricing in a 45 basis point rate cut by year-end. With that in mind, what else is left to drive the S&P 500 higher other than commentary from White House officials?

Fed Rate Expectations Trend

This image is no longer relevant

There is a common belief in the market that China has effectively used its rare earth metals strategy, compelling Washington to make concessions. Meanwhile, the situation in the U.S. is worse than in many other parts of the world. Political uncertainty remains high, inflation risks accelerating, and GDP growth is likely to slow. Unsurprisingly, the S&P 500 is underperforming its international counterparts.

This comes despite individual investors having bought U.S. stocks in 25 of the last 26 weeks, according to a Bank of America survey. Without this retail "crowd," institutional players might have exited long ago. The crowd prefers to listen to optimistic rhetoric rather than analyze hard data—a fact Donald Trump and his team have skillfully exploited to keep the S&P 500 rally alive.

S&P 500 vs. Global Equity Market Performance

This image is no longer relevant

The S&P 500 has now returned to levels seen during the inauguration of the 47th U.S. president. It's been a long journey but a necessary one. The rest of the world completed that path much faster: in 2025, international stocks outperformed their American peers—and that trend may continue.

This image is no longer relevant

Following the OECD, the World Bank has now also downgraded its U.S. GDP forecast. And significantly so—from +2.8% in 2024 to just +1.4% in 2025. That's a 50% cut. Back in January, the estimate stood at +2.3%. The U.S. has only itself to blame—specifically, the White House's protectionist trade policies. According to the World Bank, if tariffs rise by another 10% from current levels, global GDP would expand by just 1.8% instead of 2.3%.

Technical Outlook

The S&P 500 is quietly approaching resistance at 6060 on the daily chart. A test of this level will determine the broader index's fate. If the index bounces off this level, it may be time to exit long positions initiated from 5945. Further buying would be warranted if it breaks through this key pivot level.

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

USD/CAD – Analysis and Forecast

Today, USD/CAD extended its gains for the fourth consecutive day, supported by steady buying interest in the U.S. dollar. Additionally, a slight decline in crude oil prices is weighing

Irina Yanina 18:04 2025-07-29 UTC+2

XAU/USD – Analysis and Forecast

Over the weekend, a trade agreement was reached between the United States and the European Union, which added to the optimism sparked by the recent U.S.–Japan deal and eased fears

Irina Yanina 17:59 2025-07-29 UTC+2

FOMC Meeting Comes into Focus (Potential for Continued Decline in EUR/USD and GBP/USD)

While market participants continue to assess the real prospects of a U.S. "takeover" of Europe and its economy, believing that any certainty is better than none, attention is shifting toward

Pati Gani 10:44 2025-07-29 UTC+2

Why EUR drops sharply?

The euro plunged by more than 1% after the EU and the US reached a trade agreement, one that, apparently, not everyone agrees with. European leaders are divided. Some supported

Jakub Novak 10:34 2025-07-29 UTC+2

The Market Is Losing Its Risk Premium

The devil is in the details. The muted reaction of the S&P 500 to arguably Donald Trump's most monumental trade deal speaks volumes. Some believe the market had anticipated

Marek Petkovich 09:26 2025-07-29 UTC+2

What to Pay Attention to on July 29? A Breakdown of Fundamental Events for Beginners

There are, frankly, very few macroeconomic reports scheduled for Tuesday, and traders' minds are not focused on counting the number of job openings in the U.S. On Monday, Donald Trump

Paolo Greco 07:13 2025-07-29 UTC+2

GBP/USD Overview – July 29: The U.S. Dollar Finally Starts to Trust Trump

The GBP/USD currency pair continued to decline on Monday. The British pound began its downward movement last week, and at that time, we concluded that purely technical factors were behind

Paolo Greco 03:44 2025-07-29 UTC+2

EUR/USD Overview – July 29: A Complete Failure for the European Union

On the 4-hour timeframe, the EUR/USD currency pair sharply reversed downward on Monday and posted a strong decline. In our opinion, this move is quite significant and telling. Let's examine

Paolo Greco 03:44 2025-07-29 UTC+2

EU–US Trade Deal. Part 2

On Monday, I got the impression that very few people in Europe knew what concessions von der Leyen was about to make. The American side of the negotiation was likely

Chin Zhao 00:45 2025-07-29 UTC+2

EU–US Trade Deal. Part 1

Four days before August 1 — the final deadline for the negotiations — the European Union and the United States announced the signing of a trade agreement. This deal

Chin Zhao 00:45 2025-07-29 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.