SPX: yep, ATH again
The inauguration of the new-old US President was in the spotlight of markets during the previous week. As there were no changes with respect to the pre-election promises, the markets continued to react positively for the rest of the week, bringing the S&P 500 to a new historically highest level. The level of 6.122 is a new historical point. Friday's trading session brought some profit-taking moments, where the index ended the week at the level of 6.101. The short reversal was mostly driven by tech companies, where Nvidia slipped by 3% to the downside. Tesla followed by 1% dip.
Regardless of positive sentiment in an after-inauguration period, the fear of tariffs still holds on the market. Investors do not perceive such a move, especially with China, in a fear that increased import prices might bring back inflation in the US. Depending on the level of tariffs, this further might imply that the Fed could be in position to hold interest rates at current levels for a longer period of time, which in the end, might impact the US growth for this year. This is why mentioning tariffs in public by the new US administration will always imply some contraction of markets in the coming period, which means increased volatility.
Another moment which is important is the US President's address at the business forum in Davos, Switzerland, where he noted that he will request a drop in interest rates, immediately. It is unclear how Fed Chair Powell and FOMC members will perceive such rhetoric, and intrusion of the US President into US monetary policy. Certainly, this will be one of the questions which will be addressed in an after-the meeting speech of the Fed Chair Powell, in the week ahead.
Overall, the week ahead will bring PCE data, Fed's interest rate decision, overview of macroeconomic data, and address of Fed Chair Powell. At the same time, big tech earnings are expected to be posted, so this could be a promise of another challenging and volatile week on financial markets.
Regardless of positive sentiment in an after-inauguration period, the fear of tariffs still holds on the market. Investors do not perceive such a move, especially with China, in a fear that increased import prices might bring back inflation in the US. Depending on the level of tariffs, this further might imply that the Fed could be in position to hold interest rates at current levels for a longer period of time, which in the end, might impact the US growth for this year. This is why mentioning tariffs in public by the new US administration will always imply some contraction of markets in the coming period, which means increased volatility.
Another moment which is important is the US President's address at the business forum in Davos, Switzerland, where he noted that he will request a drop in interest rates, immediately. It is unclear how Fed Chair Powell and FOMC members will perceive such rhetoric, and intrusion of the US President into US monetary policy. Certainly, this will be one of the questions which will be addressed in an after-the meeting speech of the Fed Chair Powell, in the week ahead.
Overall, the week ahead will bring PCE data, Fed's interest rate decision, overview of macroeconomic data, and address of Fed Chair Powell. At the same time, big tech earnings are expected to be posted, so this could be a promise of another challenging and volatile week on financial markets.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.