Wall Street Sets New Records as Trump Renews Tariff Threats
EUR/USD
Key zone: 1.1580 - 1.1650
Buy: 1.1650 (on a strong positive foundation) ; target 1.1800-1.1850; StopLoss 1.1580
Sell: 1.1550 (on pullback after 1.1650 retest) ; target 1.1350; StopLoss 1.1620
The US stock market ended last week better than expected: the S&P 500 rose by 0.8%, Nasdaq added 1%, and the Dow Jones gained 470 points. The main driver was inflation data, which came in softer than forecasts, reinforcing expectations of an imminent Fed rate cut and reviving risk appetite.
The technology sector once again led the rally, while financial stocks also gained in value — dovish monetary rhetoric raised hopes for an increase in lending activity.
Washington is preparing for a new escalation in the trade and political conflict:
- The US Senate will attempt to overturn Trump’s tariffs on imports from Canada and several other countries, though the chances of success are slim. This is more a political gesture than a realistic attempt, aimed at signaling dissatisfaction among businesses and consumers facing trade barriers. Reminder: the White House suspended trade contacts after Ottawa used a Ronald Reagan quote about tariffs in an ad campaign — a move Trump called “provocative.” Canada remains calm and invites dialogue.
- Trump continues his preference for unilateral decisions: he intends to act against Venezuela independently, without consulting Congress. Yet inside Congress, questions are growing over the legality of recent US Navy strikes in the Caribbean, which Washington claims targeted drug traffickers.
- India is also refusing to play by Washington’s timetable, postponing a trade agreement. New Delhi made it clear it will not bow to US pressure. Negotiations continue, but no mutually acceptable results have been achieved so far.
At present, the most negative market factor remains the US government shutdown, now entering its fourth week. Democrats continue blocking the Republican temporary funding bill, demanding an extension of healthcare subsidies.
The standoff with Trump creates a dangerous backdrop for the upcoming Fed meeting, where policymakers must weigh growing economic risks. Powell and his team continue to pursue a cautious course — policy easing is seen as a safety measure against a potential rise in unemployment, not as a forced decision.
This week’s key developments include:
- The Bank of Canada is expected to cut its rate again despite tensions with Trump.
- Japan seeks balance: the BOJ will make its rate decision less than 24 hours after the Fed. The new Prime Minister Sanae Takaichi favors economic support rather than tightening.
- Europe opts for a pause: inflation has stabilized near the 2% target, and the Eurozone economy remains surprisingly resilient despite US tariffs and global demand swings. Rates are likely to stay unchanged at 2.0%, giving the euro another opportunity for positivity.
Reminder: the fundamental background for this week is aggressive. Across both European and Asian assets, pending volumes are accumulating at key levels on both sides of the market. Speculation and price-zone adjustments are likely ahead of major fundamental events. New positions should be opened only with strict risk control.
So we act wisely and avoid unnecessary risks.
Profits to y’all!
