Stock Market Volatility and Anxious Expectations
The U.S. stock market continues to be shaken by Donald Trump's uncertain stance on import tariffs. Investors are eagerly awaiting next week's Federal Reserve meeting, hoping for hints of a possible interest rate cut. This could partially stabilize markets that are going through one of the most difficult periods this year.
Stocks Sink: Billions at Risk
The collapse in stock prices in recent days has reached a critical point: on Thursday, the S&P 500 (.SPX) officially entered a correction phase, having lost more than 10% from its record peak on February 19. Despite Friday's sharp rise, the market has lost more than $4 trillion in capitalization over the week. The biggest hit was particularly felt by major corporations such as Nvidia (NVDA.O) and Tesla (TSLA.O), whose shares were among the hardest hit.
Fed meeting: what are the markets waiting for?
Amid fears of a slowdown in economic growth, investors are closely monitoring the actions of the Fed. The escalating trade war initiated by Trump adds uncertainty, which makes the decisions of the US central bank especially important.
According to analysts, at the upcoming meeting on Wednesday, the Fed is likely to keep the key rate unchanged. However, the main focus of market participants will be on the regulator's rhetoric: the Fed is expected to hint at a possible rate cut in the future. This could be a decisive factor in restoring confidence on Wall Street and preventing a further collapse in quotes.
The situation remains tense, and uncertainty around tariff policy and monetary decisions makes investors remain cautious. The coming weeks will show whether the Fed can find a way to restore stability to markets.
Inflation is slowing, but the Fed is in no rush to cut rates
The latest consumer price data brought some relief to market participants: inflation pressures have eased, supporting hopes for lower interest rates. However, despite the slowdown in price growth compared to 2022, when the Federal Reserve began its aggressive tightening cycle, inflation remains above its 2% target.
However, recent weak macroeconomic data could play a decisive role in the Fed's future course. If economic data continues to disappoint, the regulator will have more reasons to ease policy.
Markets are bracing for easier policy
Investors are already pricing in a deeper rate cut. According to federal funds futures, the projected rate cut through 2025 is about three-quarters of a percentage point. Currently, the key rate is in the range of 4.25%-4.5%, but markets believe that the Fed will be forced to ease monetary policy amid a deteriorating macroeconomic environment.
Particular attention will be focused on the comments of Fed Chairman Jerome Powell after the announcement of the rate decision. It is his rhetoric that will give markets an idea of the regulator's next steps and the prospects for the American economy.
Concerns are growing on Wall Street
While investors are hoping for a rate cut, some leading analysts have become more cautious in their forecasts. The largest financial institutions are revising their expectations for the American stock market.
Goldman Sachs lowered the target level of the S&P 500 index for the end of 2025 from 6,500 to 6,200 points, and Yardeni Research experts adjusted their optimistic forecast from 7,000 to 6,400 points. Meanwhile, the S&P 500 closed Friday at 5,638.94.
These changes reflect growing concerns about a slowing economy and potential pressure on corporate profits. The coming months will depend on the actions of the Fed, geopolitics, and the future of inflation.
Markets in turmoil: Volatility at its highest since August
Stock markets continue to show increased volatility, with the Cboe Volatility Index (.VIX) soaring to its highest since August this week before retreating slightly. Investor jitters are growing amid a volatile economic environment and trade policy uncertainty.
Trade Wars Return: Tariffs Could Hurt Companies and Consumers
Markets will be focused on the ongoing tariff standoff next week, with analysts warning that new tariffs could hurt corporate profits and push up consumer prices.
The latest flare-up in the row came after Donald Trump on Thursday raised the possibility of imposing a 200% tariff on European wine and spirits. The move came in response to the European Commission announcing plans to impose retaliatory tariffs on $28 billion worth of American goods the day before. This was in response to existing US tariffs on steel and aluminum imports.
Is the Fed Losing Influence? Politics Takes Center Stage
While the Federal Reserve has played a key role in shaping sentiment on Wall Street in recent years, geopolitics and trade issues are increasingly important. According to Nathan Tooft, chief investment officer at Manulife Investment Management, the coming months will be marked by political risks that will weigh on financial markets.
Gold holds near $3,000 an ounce
With trade wars escalating and geopolitical tensions rising, investors continue to seek refuge in precious metals. Gold prices remained just below the all-time high of $3,000 an ounce on Monday, reached late last week.
Spot gold was up 0.1% at $2,988.68 an ounce by 07:15 GMT. The safe-haven asset had risen above $3,000 for the first time on Friday, hitting a record $3,004.86 an ounce.
Markets remain volatile, with investors watching developments closely to see what will be the next trigger for the global economy.
Trade Wars Under Attack Again: Consumer Sentiment Worsens
Fears that Donald Trump's aggressive tariff policies will cause prices to rise and hurt the economy have once again come into focus. Fresh data showed that consumer sentiment fell to its lowest level in two and a half years in March.
At the same time, inflation expectations are showing an alarming increase. This confirms analysts' concerns that higher prices for imported goods could increase pressure on the economy, undermining purchasing power.
Recession: Inevitability or a Temporary Adjustment?
While Wall Street debates the risks of an economic slowdown, US Treasury Secretary Scott Bessent has made a mixed statement. According to him, a full recession is not guaranteed, but an adjustment in economic activity is possible. This statement leaves room for interpretation, highlighting the uncertainty of the future course of the economy.
Gold Continues to Rise: A New Round of Recovery?
Despite economic turbulence, precious metals continue to strengthen their positions. Gold, traditionally a safe haven during times of volatility, has already gained about 14% since the start of 2025.
Technical analysts say the short-term trend remains positive, with the next key resistance levels expected to be $3,016 and $3,030 per ounce. Given the ongoing macroeconomic risks, investors continue to view gold as a key hedge against inflationary threats.
All Eyes on the Fed: Crucial Meeting on Wednesday
Markets are focused on the Federal Reserve meeting on Wednesday. The main question on investors' minds is whether the Fed will maintain its current course or hint at a possible rate cut in the future.
The key will be the inflation forecasts in the updated dot chart, as well as statements from Fed Chairman Jerome Powell. If he expresses concerns about the impact of trade tariffs on the economy, this could be an additional catalyst for further gains in gold prices.
Other metals are also on the rise
Amid expectations of the regulator's decisions, gold's positions are not the only ones strengthening. Spot silver rose by 0.1%, reaching $33.81 per ounce. Platinum added 0.4% and is trading at $997.04 per ounce, while palladium also showed an increase of 0.4%, reaching $969.22 per ounce.
All this indicates increased demand for safe-haven assets, which confirms the high level of uncertainty in the global economy. In the coming days, investors will continue to monitor events that may determine the further trajectory of financial markets.
