Daily Market Analysis from ForexMart

The main events by the morning: April 30

The United States may withdraw from the negotiations if Russia and Ukraine do not make significant progress soon. The decision to continue the negotiations will be made by Trump, and in the absence of results, the States will have no choice but to stop participating in them. State Department spokeswoman Tammy Bruce stressed that the United States is aiming for a «complete and long-term cease-fire and an end to the conflict,» rather than a temporary truce.

Tariffs have a negative impact on China's economy: export orders dropped sharply in April. High U.S. duties have begun to have a significant impact on production, and new export orders have fallen to their lowest levels since the start of the Covid-19 pandemic. The Purchasing Managers' Index (PMI) dropped to 49, indicating a contraction in the manufacturing sector and is the worst reading since December 2022.

Trump imposed duties to reduce the US trade deficit, but brought it to a record level over the past 30 years. In March, the United States imported $162 billion more goods than it exported. This is a record since the 1990s and 75% more year-on-year, the U.S. Census Bureau reported. The main reason for this growth was a sharp increase in import purchases by companies before the tariffs came into force, which particularly affected goods with a long shelf life.

Pakistani Information Minister Attaullah Tarar said that India is allegedly planning a military strike on Pakistan within 24-36 hours. He noted that the incident in Pahalgam would be the reason for a possible attack. Tarar added that «any act of aggression will be met with a strong response, and India will bear full responsibility for the serious consequences in the region.»

Trump said he understands economics better than Powell. During a rally marking the first 100 days of his presidency, Trump promised to make a «fair deal» with China and noted that the world needs a «revolution of common sense» and the United States needs low interest rates.

EUR/USD: Weekly Preview. The May FOMC Meeting and (Possible) U.S.-China Trade Talks

The new week promises to be informative for EUR/USD traders despite the fact that the economic calendar is not full of important releases. Most notably, the next Federal Reserve meeting, scheduled for May 6–7, will determine the central bank's future course of action.

Despite a relatively light economic calendar, the FOMC meeting is the week's central event. Given Donald Trump's recent criticisms of Fed Chair Jerome Powell, it will be particularly interesting to see whether the central bank's rhetoric shifts—especially regarding the timing and pace of monetary policy easing. Even aside from the president's remarks, the Fed faces a challenging environment: rising inflation expectations and a slowdown in U.S. economic growth.

According to the latest data, the U.S. CPI slowed in March: headline inflation dropped to 2.4%, while core inflation eased to 2.8%. However, that report has already lost relevance, reflecting pre-tariff conditions. More current indicators show a different picture. For example, the University of Michigan's survey reports one-year inflation expectations at 6.5%—the highest since 1981. Meanwhile, U.S. GDP shrank by 0.3% in Q1, consumer confidence fell to 86.0 in April, and the manufacturing PMI dropped to 48.7.

April's Nonfarm Payrolls can be interpreted both positively and negatively. The number of jobs added was 177,000—above the 133,000 forecast. However, the figure remained below 200,000 for the fourth straight month, and leading indicators point to worrisome trends. For instance, initial jobless claims have increased for two consecutive weeks, hitting 241,000 last week— the highest since late February.

It's worth recalling that Powell commented sharply on the introduction of new tariffs in April, warning that such measures would slow the U.S. economy, raise unemployment, and stoke inflation. That prediction has already partially materialized. Powell also reassured markets that the Fed would not rush to cut rates.

I believe the Fed will likely maintain its current monetary policy stance after the May meeting and continue to adopt a cautious tone. The central bank will likely focus more on inflation risks than recession fears. Higher tariffs are expected to accelerate inflation, especially since many U.S.-made products rely on imported components. Consequently, prices for both imported and domestic goods are rising. Given the absence of any trade deals from Washington—including with China, where talks haven't even begun—it's unlikely that the Fed will lower rates in May or June.

This expectation aligns with market sentiment. According to the CME FedWatch tool, the Fed's probability of leaving rates unchanged in May is 97%, while the probability of a rate cut in June is 35%.

If the Fed sticks to this base scenario, the dollar will likely have a muted reaction. First, markets have already priced it in. Second, attention will be focused on the wording of the accompanying statement and Powell's commentary. Any pessimistic forecasts from the Fed could add pressure on the dollar.

The May Fed meeting is the most significant scheduled event of the week. The keyword here is "scheduled" because the forex market is now frozen mainly in anticipation of something unscheduled but widely expected: the beginning of trade negotiations between the U.S. and China.

To recap, Trump hinted at a willingness to return to the negotiation table last week. Meanwhile, China's Ministry of Commerce stated that Beijing is "assessing the U.S. proposal to begin dialogue." If both sides sit down to negotiate next week, the dollar will receive strong support, regardless of the outcome. The initial market reaction will be emotional and clearly in the greenback's favor. Although the trend may reverse later (especially if talks stall or hit a deadlock), the dollar would likely strengthen in the short term due to increased demand.

However, if no progress is made on initiating U.S.-China negotiations next week, the dollar could come under background pressure, with the Fed becoming the week's central market mover.

From a technical standpoint, the EUR/USD pair attempted to test the 1.1260 support level last week (the lower line of the Bollinger Bands indicator on the 4H chart) but eventually ended the week at 1.1300—marking the fourth consecutive Friday close within the 1.13 handle. Short positions will only become relevant if EUR/USD sellers consolidate below 1.1260, opening a path toward the 1.12 level. If bears fail to make a "southern breakout," the pair will likely trade within the 1.1300–1.1400 range.

Спонж для макияжаSkechers' $9B, Indexes Sink, Asia Surges: A Day of Change

Markets Take Pause After Record Rally
The S&P 500 Index slipped Monday, ending its most impressive run of gains in two decades. Investors are taking a wait-and-see approach ahead of a key Federal Reserve meeting later this week. Optimism has been dampened by President Donald Trump's surprise remarks about upcoming tariffs.

Nine Steps Up, One Step Back
The first warning signs were on April 2, when the Trump administration announced its first round of tariff measures. At that time, the S&P 500 index lost almost 15% in a short period. However, the markets soon recovered their losses: the index demonstrated steady growth for nine trading days in a row, reaching its best dynamics since 2004. Monday's decline was the first break in this growth.

A wave of correction covered all three key indexes
On Monday, the main Wall Street indexes ended trading lower, reflecting investor nervousness amid the White House tariff announcements and news from major corporations. The Dow's nine-day rally was interrupted, and the tech sector came under pressure again.

Trading day results:

The Dow Jones Industrial Average fell by 98.60 points (-0.24%) and closed at 41,218.83, ending its longest positive streak since December 2023;
The S&P 500 lost 36.29 points (-0.64%) and stopped at 5,650.38;
The Nasdaq Composite fell by 133.49 points (-0.74%) to 17,844.24.
Hollywood is nervous
After President Trump's announcement of possible 100% tariffs on foreign films, shares of companies associated with the production and distribution of content went into the red. However, by the close of trading, some of them were able to partially recoup their morning losses.

Netflix fell by 1.9%, which interrupted its 11-day rise;
Amazon.com also fell 1.9%, continuing to weigh on Big Tech;
Paramount Global lost 1.6%, reacting to the threat of media import restrictions.
Buffett steps down
Berkshire Hathaway Class B shares fell 5.1% after Warren Buffett, a symbol of resilience and long-term growth in the market, announced his intention to step down as CEO. The departure of the "Oracle of Omaha" was a significant moment, raising concerns among investors about the future of the company.

All eyes on the Fed
Market participants are focused on Wednesday, when the US Federal Reserve will publish its latest policy statement. According to analysts, the benchmark interest rate is likely to remain unchanged. But more importantly, what will Fed Chairman Jerome Powell say. His rhetoric will be closely analyzed for hints of a possible reversal in monetary policy. The regulator is expected to ease the rate by 75 basis points by 2025, with the first cut possible as early as July, according to LSEG, a platform that analyzes investor expectations.

Tariffs and Profits: Balance Sheet at Risk
As investors wait to hear from the Fed, they are increasingly worried about the potential impact of US tariff policy. Fresh earnings reports have come as a direct blow: Tyson Foods shares have fallen 7.7% after the meat producer missed revenue forecasts.

Experts say that new trade barriers could hamper international supply and put pressure on profitability, especially in sectors with high export dependence.

Deal of the Day: Skechers Surprises Wall Street
Unlike the food industry, the retail market has pleased investors. Skechers has become a real sensation of the day: the company's shares have soared by 24.3% after the announcement of the buyout of the brand by private equity firm 3G Capital. The deal is valued at $9.4 billion and has already earned the status of one of the largest M&A deals in the consumer sector this year.

Volatility without drama
Global stock markets demonstrated restrained dynamics on Tuesday. Indices fluctuated in a narrow corridor, and investors continued to digest the risks associated with US trade measures and the potential impact on global growth. Against this backdrop, the dollar began to recover recent losses, especially against the currencies of the Asian region.

Hong Kong sounds the alarm
The activity was especially noticeable on Tuesday in Hong Kong, where the currency regulator was forced to intervene. To protect the established currency corridor and prevent excessive strengthening of the Hong Kong dollar, the central bank spent $7.8 billion. This was the largest intervention in recent months.

Yuan and Taiwan dollar are among the leaders of growth
In mainland China, the yuan rose to 7.23 per dollar, reaching a maximum in almost two months - since March 20. The Taiwan dollar was even more explosive, settling at 30 per dollar on Tuesday morning, not far from a three-year peak of 29.59 set the previous day. The currency has gained an impressive 8% in two days.

Asian Stocks Lose Momentum
Despite the currency action, stock markets in the region were muted. MSCI's broad index of Asia-Pacific shares (excluding Japan) slipped 0.2%, with Japanese bourses closed for a national holiday.

Taiwan's TWII index also fell 0.3%, reflecting a stronger local currency that could weigh on export competitiveness;
In China, where trading resumed after the holiday, the CSI300 index opened slightly higher, reflecting cautious optimism;
Meanwhile, Hong Kong's Hang Seng lost 0.2%, weighed down by currency interventions and growing uncertainty.
A ghost of a chance for dialogue
Amid all this turbulence, investors have a glimmer of hope for de-escalation: China is reportedly considering negotiations with the United States on tariffs. Washington has submitted a proposal, and Beijing is currently reviewing the terms of the dialogue, according to official sources. The news has become a focal point for markets that could shift the balance of power in the coming weeks.

Oil levels off after a slump
Oil prices showed signs of stabilization on Tuesday after a sharp plunge the previous day, when prices hit their lowest levels in four years. The main factor was the OPEC+ initiative to accelerate production increases, a move that has worried traders and analysts worried about a supply glut amid unstable demand.

While there were no sharp moves, the market remains jittery as investors continue to monitor the balance between supply and global economic risks, including the potential impact of a tariff war and a slowdown in industrial production.

Investors seek safety in gold
Amid market uncertainty and rising geopolitical risks, gold has once again become a magnet for investors. The precious metal hit a weekly peak on Tuesday, reflecting increased demand for safe haven assets. The increased interest in gold is due not only to volatility in commodity markets, but also to expectations about the Fed's future actions and a global economic slowdown.

Analysts say that if uncertainty persists, gold demand could continue to rise, especially given the weakening dollar and signs of falling Treasury yields.

Gold Returns to Growth

Gold has resumed its upward movement as investors analyzed trade-related comments from U.S. Treasury Secretary Scott Bessent while awaiting the Federal Reserve's decision on interest rates.

Bessent recently stated that several attractive offers were made to the United States during negotiations with trade partners, reiterating that some deals might be announced as soon as this week. However, no specific details followed, causing investors and traders to question the credibility of these developments. While the U.S. Treasury Secretary mentioned the possibility of a significant reduction in tariffs on U.S. goods, he also clarified that no major concessions would be made for trade partners.

This position slightly softens the rhetoric regarding the domestic market but dampens hopes for a quick recovery of global trade relations and the resolution of ongoing conflicts. In the context of growing economic instability caused by the pandemic and geopolitical factors, protectionist measures—even in a milder form—are likely to worsen the situation. Restricting access to the U.S. market, even with some tariff reductions, will pressure partner economies, forcing them to seek alternative development paths and strengthen their domestic markets. In the long term, such an approach could lead to the fragmentation of the global economy, a decline in international trade volumes, and slower economic growth.

Nevertheless, according to Bessent, the latest GDP data do not suggest an impending recession. He emphasized the resilience of consumer spending, which remains the key driver of economic growth. However, recent U.S. trade balance figures tell a different story. A sharp 14% month-over-month increase in imports indicates a slowdown in economic growth, which will likely continue in the near term.

Bessent also noted the importance of closely monitoring the global economic situation. Geopolitical tensions, supply chain disruptions, and the energy crisis in Europe could negatively affect U.S. economic growth. Therefore, although the current indicators appear encouraging, vigilance is necessary to remain prepared for potential challenges.

As for gold prices, they rebounded due to fears that trade tensions may further slow the global economy. Added to this is the Federal Reserve, which is expected to maintain a wait-and-see approach today to assess how the trade policies implemented last month impact the economy before making any changes to U.S. interest rates. The Fed is expected to keep rates unchanged at this meeting, despite repeated criticism from President Trump toward Fed Chair Jerome Powell for not cutting rates.

From a technical standpoint, buyers need to overcome the nearest resistance at $3400 to aim for $3421, above which it will be challenging to gain a foothold. The most distant target stands at the $3450 area. Bears will attempt to regain control of $3369 in case of a decline. If they succeed, a breakout of this range would deal a serious blow to the bulls and push gold toward a low of $3341, with the prospect of reaching $3313.

The Market Will Face Reality

How quickly things change on the financial markets! Before America's Liberation Day, investors viewed the 10% universal import tariff as disastrous. Now, it's seen as the most favorable option. The S&P 500 has climbed 14% from its April lows, erasing all losses since the imposition of the highest U.S. tariffs since the early 20th century. But is this justified, considering the tariff burden remains at very high levels despite being reduced?

Most of the spring rally in the S&P 500 was emotionally driven. Investors were buying the rumor that the April 2 tariffs were the peak and would soon be lowered, making it an "ideal" time to buy stocks. According to Bank of America, the time has come to "sell the fact," meaning the upward movement of the broad equity index is likely over.

This is supported by Bloomberg's model tracking S&P 500 corporate earnings, which has now moved into the red zone, indicating a potential deterioration in financial results. Historically, this does not bode well for equities. In seven previous cases when the index entered the red zone, the S&P 500 dropped by an average of 5.6% over the following 12 months.

S&P 500 Companies' Expected Earnings Trajectory
This seems quite plausible. Donald Trump believes that reducing tariffs on Chinese imports from 145% to 80% would be "fair"—but only if China reopens access to its markets for U.S. companies. According to Bloomberg, S&P 500 companies on average earn 6.1% of their revenue from selling goods in China or to Chinese companies. Beijing's 125% retaliatory tariffs would significantly worsen their financial performance.

Bilateral trade between the U.S. and China is valued at $700 billion. China has invested $1.4 trillion in the U.S. An escalation of the trade war would be harmful not only to the largest Asian economy, whose exports are already suffering, but also to the U.S. Growing recession risks would exert serious pressure on the S&P 500.

China's Export, Import, and Trade Balance Dynamics

In this context, statements from White House officials about progress in U.S.-China negotiations—and a potential agreement whose details may be announced on Monday—sounded like music to the ears of stock market bulls. Still, the market has long been driven by emotion. Is it now time to face the truth? The trade war threatens both economic growth and corporate profits. Against this backdrop, the stock market rally appears excessive.

Technically, on the daily chart, the S&P 500 shows a high probability of forming a bearish reversal pattern known as Anti-Turtles, highlighted by a candlestick with a long upper shadow. A drop below 5635 would trigger a sell signal for the broad index.

US Market News Digest for May 13

Citigroup gains, eBay under pressure
Citigroup shares are posting steady gains after breaking above key technical levels, signaling potential for continued upside. Market participants view the bank's stock as promising amid signs of stabilization in the financial sector.

However, to mitigate risk, analysts recommend hedging long positions in Citigroup with short positions in eBay. The latter remains in a downward trend, reflecting weakness in the online retail sector.

US indices rise on signs of trade progress
US stock indices ended the session with strong gains after reports surfaced of a potential tariff reduction between the United States and China. The S&P 500, Dow Jones, and Nasdaq all recorded notable positive moves, underscoring improved investor sentiment.

Optimism is being fueled by expectations of imminent agreements that could reduce uncertainty and spark a rebound in global trade. Increased buying activity signals renewed market confidence.

Market supported by tariff relief and Goldman Sachs' forecast
Markets responded positively to both a rollback in trade barriers and upbeat forecasts from Goldman Sachs analysts, who ruled out a US recession in the near term. These factors helped reduce volatility and push equities higher.

Still, experts caution against complacency: with inflation lingering and limited economic growth, the risk of stagflation remains. Investor focus has now shifted to the trajectory of key macroeconomic indicators.

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US Market News Digest for May 14

IBM shares rise, J&J still in downtrend
IBM stock continues to climb, supported by technical chart signals pointing to a potential move towards the $265.90 level. Investors are showing interest in the company's stock, backed by strong corporate performance and a favorable technical backdrop.

Meanwhile, Johnson & Johnson shares appear less resilient, remaining in a steady downtrend. Price pressure stems from both broader market volatility and concerns over the company's future earnings potential.

S&P 500 eyes further gains, but consolidation may loom
The S&P 500 is breaking through key resistance levels, paving the way for further gains amid broad-based market optimism. This technical breakout reinforces investor confidence in the ongoing bullish trend.

However, analysts caution that a short-term consolidation could emerge, driven by profit-taking and the market's anticipation of fresh economic data. Investors are advised to watch volume trends and macro headlines closely.

US stock market gains driven by retail investor activity
The US stock market is posting solid gains, fueled by heightened activity among individual investors. Expectations of tariff reductions are also contributing to the positive momentum, boosting demand for riskier assets.

Still, professional market participants urge caution. They highlight potential risks tied to overheated sectors and possible shifts in the regulatory environment, which could alter the current market structure.

Optimism persists despite losses in select equities
Despite a pullback in UnitedHealth shares, overall sentiment in the US market remains upbeat. The S&P 500 continues its upward trajectory, supported by the absence of inflation surprises and encouraging news on foreign investment.

Statements hinting at potential investment flows from Saudi Arabia have reinforced interest in equities. This has strengthened investor confidence in the resilience of the current rally, even as pockets of weakness persist in specific stocks.

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US Market News Digest for May 15

JP Morgan gains, Kraft Heinz under pressure
Shares of JPMorgan Chase continue to climb steadily towards the 295.25 level, supported by strong investor demand and solid financial results from the bank. This positive momentum stems from broader interest in the banking sector.

Meanwhile, Kraft Heinz shares remain under pressure and continue to decline, making them a suitable hedge against long positions in JPMorgan. This strategy may prove useful amid ongoing market uncertainty.

US stock market ends mixed
US equity indices ended the trading session with mixed performance: the Nasdaq rose by 0.7%, while the Dow Jones closed in negative territory. The tech sector was buoyed by strong earnings reports and growing interest from retail investors.

However, concerns persist over overbought individual assets and rising Treasury yields, both of which could exert short-term pressure on equities.


S&P 500 rebounds, but risks persist
The S&P 500 is showing a V-shaped recovery, reflecting the resilience of the US economy and easing trade tensions. Improved consumer sentiment and declining inflation expectations are also contributing to the upward momentum.

Still, analysts caution that a market correction remains possible, particularly if upcoming macroeconomic data disappoint. Market participants are advised to remain cautious and factor in heightened volatility.

Trump announces $600 billion deals with Saudi Arabia
US President Donald Trump unveiled plans for $600 billion worth of deals with Saudi Arabia, including purchases of US-made microchips. The announcement boosted interest in the technology sector and export-focused companies.

However, experts remain skeptical about the feasibility of such large-scale agreements, citing political and economic headwinds. Nevertheless, the mere discussion of such initiatives is having a positive effect on market expectations.

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