empty
07.03.2025 12:12 PM
Donald Trump explains decline in stock market

There will be no lifeline. The S&P 500 continues to send distress signals, but Donald Trump is not paying attention or at least pretends not to. In one of his speeches, the US president stated that he did not care about what was happening in the American stock market because, in the long run, the economy would strengthen, so investors had nothing to worry about. On another occasion, the Republican claimed that globalists were behind the stock market sell-off, accusing them of being envious of the United States.

US Stock Market Trends

This image is no longer relevant

A scapegoat can always be found. For Donald Trump, it is once again China. Beijing was blamed for the COVID-19 pandemic, and now it is accused of triggering the US stock market's decline. The story of China's DeepSeek was the catalyst for investors fleeing American tech stocks. It is no surprise that the Magnificent Seven were the first to enter correction territory, followed by the Nasdaq 100. Now, a 10% drop in the S&P 500 from its February highs seems inevitable.

Trump's theory about globalists deserves attention. However, the record highs in stock indexes after the US presidential election were driven by hopes for economic acceleration and the assumption that the White House would act as a safety net for the S&P 500 in case of a steep decline. Neither of these expectations is materializing.

The more economic data comes in, the more concerns grow about the US economy. The disappointing February ADP employment report was followed by bleak trade balance figures. The front-loading of imports ahead of Trump's tariff hikes led to a record US trade deficit in January—34% higher than in December.

US Trade Balance

This image is no longer relevant

Net exports may drag down GDP growth, making the Atlanta Fed's forecast of a US economic contraction in the first quarter increasingly realistic. The urge to offload toxic US assets is rising, leaving the S&P 500 with little choice but to fall.

This image is no longer relevant

News that the White House exempted some goods from the 25% tariffs under the North American Free Trade Agreement (NAFTA) did not provide lasting relief. The exemption covers 50% of imports from Mexico and 38% from Canada. The S&P 500 briefly rebounded but quickly resumed its decline. Without White House support, whether against globalists' alleged manipulations or fears of an approaching recession, the US stock market has little chance of recovery.

Technically, on the S&P 500 daily chart, the Broadening Wedge pattern has been activated based on the Three Indians pattern. Point 5 could be located significantly lower. As long as the broad-market index trades below 5,800, selling remains the preferred strategy.

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

The Pound Ignores Weak Data and Persistently Tries to Continue Rising

The macroeconomic data from the UK published last week looks frankly weak—everything is in the red zone, meaning worse than expected. Nevertheless, the pound continues to climb upward regardless

Kuvat Raharjo 19:36 2025-06-16 UTC+2

CFTC Report: The Dollar Is Being Sold Off Again. Awaiting New Revelations from Trump

Five weeks ago, the total short position on the U.S. dollar against major currencies stopped increasing, which gave reason to believe the dollar might begin an offensive in the currency

Kuvat Raharjo 12:14 2025-06-16 UTC+2

GBP/USD. Analysis and Forecast

Today, the GBP/USD pair is attempting to regain positive momentum while remaining on the defensive. Traders prefer to wait for the release of key data before opening directional positions

Irina Yanina 12:10 2025-06-16 UTC+2

EUR/USD. Analysis and Forecast

Today, the EUR/USD pair is attempting to regain positive momentum, approaching the psychological level of 1.600 and price levels last seen in 2021. Traders are eagerly awaiting the important political

Irina Yanina 12:08 2025-06-16 UTC+2

The Israel-Iran Confrontation. Fed Meeting. What's Next? (I expect further decline in USD/CAD and a local pullback in gold before a new wave of growth)

Israel and Iran are exchanging missile strikes, but it seems markets are trying to play their own game, assuming that this conflict will not cross the nuclear threshold

Pati Gani 10:51 2025-06-16 UTC+2

EUR/USD: War Is No Ally to the Greenback

At the start of the new trading week, the EUR/USD pair stayed within the 1.15 range and is even trying to approach the resistance level of 1.1600 despite the ongoing

Irina Manzenko 10:32 2025-06-16 UTC+2

What to Pay Attention to on June 16? A Breakdown of Fundamental Events for Beginners

No macroeconomic reports are scheduled for Monday, but the market does not lack news. This week, Donald Trump announced his intention to raise all import tariffs, as none

Paolo Greco 06:46 2025-06-16 UTC+2

GBP/USD Overview – June 16: How Trump Is Undermining the Dollar

The GBP/USD currency pair will remain under the influence of geopolitics and politics in the new week. Essentially, we've been saying the same thing every day for the past four

Paolo Greco 04:54 2025-06-16 UTC+2

EUR/USD Overview – June 16: The Israel-Iran Conflict Changes Nothing

The EUR/USD currency pair moved sharply back and forth throughout Friday. The pair traded with high volatility for two consecutive days, and there is a clear and logical explanation

Paolo Greco 04:54 2025-06-16 UTC+2

EUR/USD. Weekly Preview. Focus on the Middle East and the Federal Reserve

The final trading day of last week ended on an uncertain note. Reacting to Middle East developments, the EUR/USD pair sharply declined on Friday, retreating from the multi-year price high

Irina Manzenko 01:30 2025-06-16 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.