🚨 Market Alert: High Volatility Risk Over the Next 24 Hours
Markets may face heightened volatility over the next 24 hours as two major U.S. events occur in close succession, both with the potential to reshape expectations around growth, recession risk, and interest rate policy.
1. U.S. Supreme Court Ruling on Tariffs
At 10:00 AM ET, the U.S. Supreme Court is expected to rule on the legality of tariffs imposed during the Trump administration.
Current market pricing suggests roughly a 77% probability that the tariffs are ruled unlawful. If this outcome materializes, the U.S. government could be required to refund a significant portion of the more than $600 billion already collected.
While the executive branch may still have alternative legal mechanisms to impose tariffs, these options are slower, less effective, and more uncertain.
Beyond the legal implications, the key risk lies in market sentiment. Tariffs are currently viewed by markets as supportive to certain economic narratives. A ruling against them could trigger a repricing of downside risk, which may negatively impact risk assets, including cryptocurrencies.
2. U.S. Unemployment Data
At 8:30 AM ET, the U.S. unemployment report will be released.
Market expectation: 4.5% (slightly lower than the prior 4.6%)
Potential outcomes:
Higher unemployment: Reinforces recession concerns
Lower unemployment: Eases recession fears but further reduces expectations for near-term rate cuts
The probability of a January rate cut is already low, near 11%, and stronger labor data could effectively eliminate expectations for near-term easing.
Market Implications
Markets face a challenging setup:
Weak data increases recession fears
Strong data reinforces a higher-for-longer interest rate environment
With both events occurring within hours of each other, the next 24 hours represent a high-risk window for sharp market moves.
Traders and investors may want to remain cautious and prioritize risk management amid elevated uncertainty.
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