empty
06.05.2025 10:16 AM
The Market Took a Step Back

The longest winning streak of the S&P 500 in two decades has come to an end. But who's responsible? The Federal Reserve, which plans to keep rates unchanged at its May 6–7 meeting? Or Donald Trump, who has revived tariff threats? The President announced 100% import duties on films produced outside the United States. Investors had seriously expected that the peak of trade policy uncertainty in Washington was behind them, and that duties would only be reduced going forward. Not so fast!

S&P 500 Daily Performance

This image is no longer relevant

Wells Fargo Securities is banking on that very peak of uncertainty being behind us. The firm is firmly sticking to its forecast for the S&P 500 to reach 7007 by the end of 2025 and remains Wall Street's most bullish forecaster. Fundstrat follows with a target of 6600, and Scotiabank with 6650. The consensus estimate from 29 strategists projects the broad equity index to rise to 5853.

Neither the positive ISM non-manufacturing activity data nor the fiery speeches from White House officials helped the S&P 500. Commerce Secretary Howard Lutnick expressed optimism about the economy and believes Donald Trump will reshape the world. Treasury Secretary Scott Bessent announced trade deals with 17 out of 18 major trading partners and claimed the U.S. remains the primary destination for global capital. The "sell America" strategy isn't worth a dime.

S&P 500 vs. Consensus Forecast for the Broad Index

This image is no longer relevant

The faster-than-expected growth in service sector activity is actually being driven by a stagflation scenario. Price components in the PMI rose even faster. If that continues, the Fed's pause in its monetary easing cycle could drag on. Futures markets are confident the federal funds rate will remain unchanged in May and now give only a 27% chance of a rate cut in June — down from 65% just a week ago.

Investors are starting to realize that if the Fed does ease policy, it will only happen against the backdrop of a cooling economy and rising recession risks — a scenario extremely unfavorable for equities.

This image is no longer relevant

There is a strong likelihood that by keeping rates steady, the Fed will again face criticism from Donald Trump, whose threats to fire Jerome Powell recently dealt a blow to the S&P 500. The President was even forced to declare, in light of the market crash, that he never intended to remove Powell. Still, the Republican's unpredictability raises the risk of renewed waves of criticism.

Technical Outlook

On the daily chart, a rejection from the pivot resistance level at 5695 has created conditions for short positions. Although these bearish positions currently look unstable, a drop below 5630 on the broad index would boost sellers' confidence and provide grounds for adding to shorts. It would make sense to return to long positions if the index climbs back above 5695.

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

AUD/JPY. Analysis and Forecast

The AUD/JPY pair is regaining positive momentum after a modest pullback the previous day. However, spot prices remain confined within a multi-day range due to mixed fundamental signals, trading near

Irina Yanina 14:39 2025-06-20 UTC+2

USD/CHF: The Pair Struggles to Gain Momentum Amid Conflicting Forces

At present, USD/CHF shows no clear intraday direction and fluctuates within a narrow range just above the 0.8155 level, reflecting market uncertainty during the European session. The Swiss franc

Irina Yanina 14:36 2025-06-20 UTC+2

The Euro Will Retain Its Strength and Investor Interest

During her speech, IMF Managing Director Kristalina Georgieva stated that she sees the potential for the euro to play a broader role globally.Her remarks came amid growing geopolitical instability

Jakub Novak 11:25 2025-06-20 UTC+2

Euro Slightly Rises After Lagarde's Speech

The euro saw a modest recovery after European Central Bank President Christine Lagarde stated that expanding trade within the region could help offset losses resulting from global fragmentation. Her optimistic

Jakub Novak 11:10 2025-06-20 UTC+2

Donald Trump – A Mastermind of Geopolitical Uncertainty (A Potential Correction in Oil and Gold Prices)

Six months into Donald Trump's presidency, it seems he has already thoroughly exhausted the world with his "brilliant" initiatives, groundbreaking actions aimed at making America great again, and his vivid

Pati Gani 09:49 2025-06-20 UTC+2

The Market Tries to Extinguish the Fire

Markets are digesting Donald Trump's announcement that a decision on U.S. strikes against Iran will be made within two weeks. The White House could have acted at any moment

Marek Petkovich 09:01 2025-06-20 UTC+2

What to Pay Attention to on June 20? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic reports scheduled for Friday. The only report of the day will be the UK retail sales report. No economic data will be released today

Paolo Greco 07:45 2025-06-20 UTC+2

GBP/USD Overview – June 20: The Bank of England Didn't Surprise

The GBP/USD currency pair traded relatively calmly on Thursday, given the fundamental backdrop available to the market. On Wednesday evening, the Federal Reserve announced the results of its latest meeting

Paolo Greco 07:16 2025-06-20 UTC+2

EUR/USD Overview – June 20: Summing Up the Fed Meeting

The EUR/USD currency pair traded relatively calmly on Wednesday and Thursday. Recall that the results of the latest 2025 Federal Reserve meeting were announced on Wednesday evening, but we didn't

Paolo Greco 07:16 2025-06-20 UTC+2

USD/JPY. Analysis and Forecast

The Japanese yen is showing weakness against the stronger U.S. dollar, with the USD/JPY pair reaching a new monthly high. This rise in the dollar against the yen is mainly

Irina Yanina 20:12 2025-06-19 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.