#CryptoCPIWatch #TradeWarEases
On Wall Street – it's a show again. But this is not a straight rise or a fall into the abyss; it’s a real tug of war. And the players are not children, but adult forces: geopolitics, technology, macroeconomics, and the market itself, which either believes in a bright future or is just pretending. Let’s try to untangle this knot of contradictions and understand who is pulling for what – and what this means for investors.
At first glance, everything looks stable: the S&P 500, like the good old mood barometer of Wall Street, is still in the positive since the beginning of the year. But this plus is not from the 'cosmic' series, but rather 'stood, looked, thought'. The Dow Jones, the index of industrial giants, has slightly retreated. On the other hand, the Nasdaq 100, which houses all our favorite tech giants, has gone up vigorously. This is already a signal: technology is now the main driver, and if the market is moving anywhere, it is due to 'tech optimism'.
The first force pushing the market up is the easing of trade tensions between the US and China. The two largest economies in the world have agreed to suspend tariff increases for 90 days. Investors breathed a sigh of relief: fewer barriers mean lower costs and greater predictability. However, let’s remember, this is just a truce, not peace. And the markets are not naive — they fully understand that any tweet or unexpected move could plunge global trade back into turbulence. So the relaxation is more of a temporary relief than confidence in tomorrow.
Meanwhile, technology continues to demonstrate resilience and inspires investors. The sector associated with artificial intelligence has practically 'shifted gears'. Nvidia and AMD are rising on news of high demand for chips — especially in the Middle East, where, according to rumors, AI projects and infrastructure are actively being discussed following Trump's recent visit. Super Micro Computer surprised everyone with a +17% increase due to partnerships in the region. It turns out that if the entire market is in a stupor, the AI sector is like that team that has already run ahead without waiting for others to decide which way to pull.
However, not everything is rosy. The second team pulling the market down is the bond market. The yield on 10-year Treasuries has surpassed 4.5%, which does not inspire shareholders at all. This means that money is becoming more expensive, and the Fed is unlikely to actively lower rates as previously hoped. The scenario of 'three to four cuts this year' has smoothly transitioned to 'well, maybe one or two'. This cools the ardor even of the hottest bulls.
The irony is that even moderate inflation does not calm the Fed. The CPI turned out to be moderate, but analysts fear a delayed effect: companies may have simply stocked up in advance, and price increases are still ahead. For now, the Fed itself remains in observation mode — 'we wait, we watch, we don’t flinch'. In central bank speak: markets, do as you wish, but clarity will not come.
So where is all this leading? We have a strong positive impulse from AI and a temporary trading breather, but also pressure from the debt market and limited incentives from monetary policy. Adding to this the divergent dynamics across sectors — we get exactly that picture of the 'market tug-of-war', where there is no obvious winner.
On the horizon – new data: statistics on producer prices, retail sales, and new comments from Fed officials. They can play the role of a 'decisive push' and set the direction. For now, the market resembles a marathon runner at the start, who seems ready to sprint but doesn’t yet know whether to go forward or backward. Therefore, we keep our finger on the pulse, remember the risks, and carefully watch who will let go of the rope first.
