empty
08.04.2025 11:49 AM
Market gives away its secret

The world is a stage, and people are its actors. Tragicomedies happen every day in financial markets, but what happened at the start of the second week of April is mesmerizing. In just a few minutes, the capitalization of the US stock market surged by $2.4 trillion thanks to a false message on social media. Its denial by the White House caused the S&P 500 to plummet. What's the message? What did the rollercoaster ride on Wall Street reveal? The nerves of investors, stretched like strings? Or was it the time to buy American stocks?

If you want to make money, use your imagination. If you're thinking about how to make big money, come up with something that will make your hair stand on end.

Someone created a fake Bloomberg account on social media, posted news from the popular media agency for a long time, and gained millions of followers with one goal. On one spring day, they posted information that Hassett was considering a 90-day pause in tariffs against all countries except China. The news was so hot that it was immediately picked up by CNBC and Reuters. The S&P 500 surged, only to fall again.

The S&P 500's reaction to the White House's tariff pause news

This image is no longer relevant

No doubt, investors are unnerved. They are worried about what the White House's protectionist policies might do to the US economy. Tariffs on imports and trade wars threaten a global recession. When fear rules market sentiment, no one wants to buy stocks.

On the other hand, the S&P 500 fell by 20% from its February peak, entering the bear market. This was the second-fastest slump since 1945. The first occurred during the COVID-19 pandemic, forcing the Federal Reserve to throw a lifeline to the US economy with mind-boggling monetary stimuli.

The dynamics of the S&P 500's transitions into a bear market

This image is no longer relevant

In such conditions, investors are trying to puzzle out whether the worst has already happened and it is now time for negotiations and tariff rollbacks. Following this logic, is it the right time to buy stocks? If fear shifts to greed, the S&P 500 rally could be so fast that it will take your breath away. The fake news on social media is proof of that. What is needed is one good piece of news to enable the broad stock index to rise from the ashes.

This image is no longer relevant

I don't think the tough times are behind us. At least one trade war, between the US and China, has already started. According to UBS, a recession in the US economy could result in zero corporate profit growth, as every 1 percentage point drop in GDP subtracts 6.9 percentage points from this indicator.

Technically, on the Daily Chart of the S&P 500, a bounce from the support level at 4,905 suggests that the broad stock index may have found a bottom.

There is a high probability of consolidation in the range of 4,900 to 5,200 or 4,900-5,330. It makes sense to sell during a rise to its upper border and buy during a drop to the lower border. In the latter case, you need to think three times, as catching falling knives is extremely dangerous.

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

GBP/USD Overview – April 24: Didn't work out? So be it...

On Wednesday, the GBP/USD currency pair managed to avoid a substantial decline, although the day before, it seemed that a downtrend was finally beginning. However, the market quickly bounced back

Paolo Greco 03:16 2025-04-24 UTC+2

EUR/USD Overview – April 24: Is it really about Powell?

The EUR/USD currency pair refrained from continuing its decline on Wednesday. As the saying goes, "Everything in moderation." The dollar gained around 200 pips on Tuesday, which shouldn't scare anyone

Paolo Greco 03:16 2025-04-24 UTC+2

The Kiwi Has a Decent Chance to Continue Rising

Inflation in New Zealand in Q1 came in slightly above expectations, rising from 2.2% to 2.5% year-over-year. This was mainly due to the goods sector, while core inflation is slowing

Kuvat Raharjo 00:59 2025-04-24 UTC+2

The Pound Holds On, but a Reversal Is Near

Inflationary pressure in the UK is gradually easing but remains elevated. In March, the core index fell from 3.5% to 3.4% year-over-year, while the headline CPI dropped from 2.8%

Kuvat Raharjo 00:59 2025-04-24 UTC+2

The Euro Takes a Hit Below the Belt

There will be no winners in trade wars. The U.S. will suffer due to a loss of trust in the dollar and other American assets, while Europe will suffer from

Marek Petkovich 00:59 2025-04-24 UTC+2

GBP/JPY. Analysis and Forecast

The GBP/JPY pair is retreating from the psychological level of 190.00, or a two-week high reached earlier today. Following disappointing UK PMI data, selling pressure has intensified, pulling spot prices

Irina Yanina 18:16 2025-04-23 UTC+2

Market walks through minefield

If the market can rally this much on hints from Treasury Secretary Scott Bessent about de-escalation in the trade conflict with China, imagine how high the S&P 500 could jump

Marek Petkovich 12:35 2025-04-23 UTC+2

The Likelihood of a Euro Reversal to the South Is Increasing

As expected, the ECB cut all key interest rates by a quarter-point, bringing the deposit rate down to 2.25%. At this meeting, no new staff projections were released, and given

Kuvat Raharjo 12:01 2025-04-23 UTC+2

Markets Await a Massive Rally if the U.S. Starts Real Negotiations with China (There is a likelihood of continued growth in #NDX and Ethereum)

A new wave of euphoria has swept through the markets. Many believe it's not a coincidence: take everything away from a person and then provide them with even the smallest

Pati Gani 09:03 2025-04-23 UTC+2

What to Pay Attention to on April 23? A Breakdown of Fundamental Events for Beginners

A considerable number of macroeconomic events are scheduled for Wednesday. All of them are Purchasing Managers' Index (PMI) reports for April in the services and manufacturing sectors. The indices will

Paolo Greco 07:01 2025-04-23 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.