The Market Is Nervous: Confident Optimism Is Still Missing

SP500

Key zone: 6,650 - 6,700

Buy: 6,700 (on strong positive fundamentals); target 6,850; StopLoss 6,650

Sell: 6,600 (on a pullback after a retest of 6,650); target 6,450-6,400; StopLoss 6,670

If on Tuesday the U.S. stock market was buying back the morning decline, then by Wednesday investors were selling the morning rise.

Asian markets showed a moderate increase amid a strong U.S. earnings season and a powerful rally in the semiconductor sector: Nikkei +0.8%, KOSPI +1.8%, Taiwan Weighted +1.4%, ASX +1.1%. Optimism was supported by record results from microchip manufacturers and expectations of monetary policy easing. Meanwhile, gold renewed its all-time high at $4,241 per ounce, reflecting a flight into safe assets amid rising trade risks and expectations of a Fed rate cut.

Yesterday, investors reacted to bank reports, Fed statements, and the escalation of the trade conflict between the U.S. and China. The Dow Jones gained 0.44%, while the S&P 500 and Nasdaq Composite declined by 0.16% and 0.76%, respectively. During the day, the S&P 500 fluctuated in a range from –1.5% to +0.39%, confirming an increase in intraday volatility.

Today, despite another round of Trump’s verbal blackmail, the market situation is relatively calm, although the VIX volatility index has slightly increased. S&P 500 futures are attempting to recover losses but risk getting stuck in the 6,630–6,680 range.

Gold and silver continue to rise. Media report queues of clients buying physical gold in banks — a clear sign of panic.

The main pressure factor on sentiment was not corporate reports but new Chinese sanctions against five U.S. divisions of the South Korean company Hanwha Ocean and Trump’s threat to impose an embargo on vegetable oil supplies to China.

London stocks are falling after weak U.K. GDP data.

Investors are awaiting the reports of Bank of America, Morgan Stanley, Abbott Labs, and ASML, which may set the short-term tone for the market.

Bitcoin is again under pressure — the price has dropped to $111,000, and spot ETFs recorded net outflows of $94 million. Trading activity has fallen by more than 25%, indicating a decline in risk appetite.

Despite the overall negativity and standard “bearish” patterns, there are several deferred potentially positive triggers:

• De-escalation of the U.S.–China trade war — possible at any moment (one Trump tweet is enough).
• End of the shutdown — Democrats and Republicans can reconcile at any time.
• Capital returning from crypto to traditional assets after the recent flash crash.

Overall, geopolitical and economic news are forming a tense backdrop for global markets. U.S. trade threats to China, political instability in France, new scandals in the crypto industry, and the IMF’s updated forecast for global economic growth are increasing uncertainty and boosting volatility.

So we act wisely and avoid unnecessary risks.

Profits to y’all!