empty
28.01.2025 09:50 AM
Panic Triggered by DeepSeek News is Overestimated (Potential Rebound of S&P 500 CFD and Rise in Gold Prices)

Recent news from China regarding DeepSeek's advancements in artificial intelligence has triggered a significant drop in the shares of major tech companies in both Europe and the United States. This decline has raised concerns about America's technological dominance. Amid this uncertainty, investors have become increasingly risk-averse, leading to a surge in demand for government bonds in developed economies.

The breakthrough in Chinese AI technology has dealt a serious blow to the U.S. AI program introduced just a week ago by Donald Trump. In response to this disappointment, market participants began actively selling shares of companies such as Nvidia, Microsoft, and others. The sell-off quickly turned panic-driven, with investors seeking to hedge against high volatility, as indicated by the "fear index" (VIX). This resulted in increased purchases of U.S. Treasuries, which caused a sharp drop in yields.

Previously, the U.S. dollar had fallen below the 108.00 level on the ICE index but gained strength due to the rising demand for Treasuries. The dollar had shown growth in anticipation of Trump's economic reforms, including potential tariffs, and expectations of rising inflation in the U.S., which made further rate cuts seem unlikely. However, the increasing uncertainty stemming from mixed signals from the new administration has recently weighed on the dollar's performance.

As the Federal Reserve begins its two-day meeting today, the U.S. dollar is starting to recover its standing in the Forex market.

According to the dynamics of federal funds rate futures, the market predicts a 97.3% chance that the Federal Reserve will keep monetary policy unchanged, despite former President Trump's calls for further rate cuts. This expectation is unlikely to significantly impact the market, as it has already accounted for this possibility. Any major changes would only arise from unexpected statements by Federal Reserve Chair Jerome Powell, although no big surprises are anticipated. Powell's press conference is expected to reaffirm the Fed's current pause in rate decisions, emphasizing the risks of inflation and the uncertainties surrounding Trump's presidency.

Regarding the stock market, the panic observed on Monday seems excessive and driven by emotion. A recovery in demand for U.S. equities, as well as for cryptocurrencies, is anticipated. The economic policies of the 47th president are expected to bolster domestic economic growth and manufacturing, particularly in light of Europe's stagnation and rising tensions with China.

Forecast of the Day

This image is no longer relevant

This image is no longer relevant

#SPX

The S&P 500 futures CFD has partially recovered from yesterday's decline, which was influenced by news about DeepSeek's achievements. There is a possibility that the contract will continue to rise towards 6100.00 after consolidating above 6000.00.

GOLD

The price of gold has stabilized above 2735.20. Weakness in the dollar could lead to an increase in the price to 2662.00.

Pati Gani,
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

XAU/USD. Analysis and Forecast

Gold prices are maintaining positive momentum for the second consecutive day. Ongoing uncertainty surrounding U.S. President Donald Trump's trade policy and its impact on the global economy continues to weigh

Irina Yanina 19:24 2025-07-10 UTC+2

USD/CHF. Analysis and Forecast

Today, the USD/CHF pair retraced part of its decline from a new weekly low recorded during the Asian session and has temporarily paused its downward movement, stopping short

Irina Yanina 12:26 2025-07-10 UTC+2

Market dupes sellers

The split within the Federal Reserve, NVIDIA's successes, and a successful auction of 10-year US Treasury bonds allowed the S&P 500 to ignore the tariff chaos. Donald Trump announced tariffs

Marek Petkovich 12:02 2025-07-10 UTC+2

What to Watch on July 10th: Fundamental Event Overview for Beginners

Macroeconomic Report Analysis: There are very few macroeconomic publications scheduled for Thursday, and none of them are expected to be significant. So what could traders focus on today? The second

Paolo Greco 09:07 2025-07-10 UTC+2

GBP/USD Overview on July 10, 2025

On Wednesday, the GBP/USD currency pair maintained its downward movement, which is corrective in nature and could end at any moment. The price remained below the moving average line

Paolo Greco 07:26 2025-07-10 UTC+2

EUR/USD Overview on July 10, 2025

The EUR/USD currency pair continued to trade very calmly on Wednesday. The pair maintained a slight downward bias, as we've noted in all of our recent articles. However, the current

Paolo Greco 07:16 2025-07-10 UTC+2

USD/CAD. Analysis and Forecast

Today, the USD/CAD pair is showing signs of recovery, rising toward the 1.3700 level and approaching the weekly high reached earlier. Fundamental factors point to bullish dominance and the potential

Irina Yanina 12:46 2025-07-09 UTC+2

Markets unfazed by Trump's new tariff threats

Donald Trump's bark is louder than his bite. Markets have grown so accustomed to his rhetoric that the S&P 500 barely flinched at the White House's latest threat to slap

Marek Petkovich 11:53 2025-07-09 UTC+2

AUD/USD. Analysis and Forecast

The AUD/USD pair is holding steady at current levels with a bullish bias but limited movement following the release of inflation data from China—Australia's key trading partner. In June

Irina Yanina 11:35 2025-07-09 UTC+2

USD/JPY. Analysis and Forecast

On Wednesday, the Japanese yen extended its decline for the third consecutive day, pushing the USD/JPY pair to a new two-week high above the key 147.00 level during the Asian

Irina Yanina 11:23 2025-07-09 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.