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15.04.2025 09:46 AM
Trump Will Either Win or Lose. Is There No Middle Ground? (Potential Renewed Decline in #SPX and Bitcoin)

On Monday, markets calmed slightly amid Donald Trump's apparent backpedaling on the trade barriers he had imposed on America's trading partners. It gives the impression that the U.S. president is starting to retreat. But is that the case?

Clearly, the U.S. orchestrated the chaos surrounding the tariffs, primarily targeting China but also aimed at Europe and India. The latter two have traditionally shown weakness and remain highly dependent on Washington. Market speculators warmly welcomed Trump's decision to grant a 90-day delay, and the subsequent pause in implementing high tariffs on computers, components, and consumer electronics helped fuel gains in tech giants' shares, which lifted other sectors and global financial markets overall.

But is Trump truly backing down, with his trade war slowly fading away or becoming a more localized conflict focused on Beijing?

In a previous article, I mentioned the distinctive psychological profile of the 47th president of the United States, which plays a huge role in America's decision-making. Whether we like it or not, that's a fact. It's already clear that Trump is maneuvering. In simpler terms, he will continue to pursue his goals — by fair means or foul. He will manipulate, make promises, break them, and so on. This is all part of American political tradition and typical of its presidents. Therefore, we should expect continued pressure on China and other trade partners as Trump seeks to impose his interests through strong-arm tactics. That means periods of easing will alternate with increased pressure. The question is whether this tactic will be effective and how it will affect market dynamics.

It seems investors are aware of the uncertain prospects of Trump's trade war, so it's unlikely we'll see lasting optimism. Most likely, any local stock market rallies will remain under the shadow of trade war uncertainty. The start of earnings season should soon offer some clarity. Yes, the trade war began in March, which isn't enough time to fully assess its impact — but if significant negative consequences begin to emerge, stocks may struggle to advance.

A similar picture will likely unfold in the commodities market. Cryptocurrencies will also remain under pressure, as they are susceptible to trade war rumors and developments. As for the U.S. dollar, after last week's decline, it has begun to consolidate below the key psychological level of 100.00.

I have serious doubts about Trump's alleged retreat. I believe that the chaos in the markets will persist. It is unclear how long this will continue. However, we can confidently say that this situation will persist until the U.S. president either reaches agreements with key trade partners or his approach to "Making America Great Again" collapses under the weight of domestic problems and mounting resistance.

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Daily Forecast:

#SPX

The CFD on the S&P 500 futures is hovering around 5397.70. If it fails to rebound from this level and resume its upward movement, we may see a local reversal and decline toward 5148.55 amid deteriorating market sentiment. The sell trigger could be a drop below 5369.56.

Bitcoin

The token is trading below the 86088.50 mark. Deteriorating market sentiment may lead to a price reversal and a decline toward 82120.85. The sell trigger could be a breakdown below 85095.00.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
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