This week, the global market was again like a roller coaster! The US-China tariff issue is hotly debated, with Trump saying one moment that talks with China are going well, and the next moment he says tariffs won't be lifted.
However, US stocks do not care about this, rising strongly on tech stock earnings, with Bitcoin also increasing by over 10%.
The weekend has arrived, and market sentiment is still good, but next week the GDP and tech giant earnings reports are coming. How will the market trend? Will it rise or fall?
Why are the US-China tariffs never-ending?
This week, the tariff issue continued to dominate the headlines. Trump initially claimed that good progress had been made with China and that he had spoken with them, leading the market to believe there would be a de-escalation.
As a result, China directly hit back: What negotiations? There is no such thing!
Seeing things were not going well, Trump changed his tone again, saying that unless China gives some concessions, tariffs will continue.
China announced a 125% tariff exemption on some US goods, but this did not calm Trump down, and the tariff tug-of-war continues.
Doesn't this situation resemble a couple arguing, with one side claiming they made up while the other says it's not true, and then they start exchanging insults again?
The market has become somewhat numb from all this back and forth, but Trump can turn on a dime, so it’s important to keep an eye on developments.
Why did US stocks rise so sharply?
Logically speaking, with the tariffs causing such a ruckus, US stocks should be trembling.
But it refuses to! Recently, tech stock earnings have been impressive one after another, pushing US stocks upward.
Yesterday, the Nasdaq index rose by 1.26%, and Tesla nearly increased by 10%.
The market seems to completely ignore Trump's tariff threats, with investors only focusing on the good news from tech stocks.
But next week is a big test: GDP data will be released on Monday, and from Tuesday to Thursday, the four tech giants META, Microsoft, Amazon, and Apple will successively announce their earnings reports, and even MicroStrategy will report its results.
If GDP is strong and earnings reports are solid, US stocks may continue to rise.
But if GDP disappoints and earnings reports flop, the market could dive directly.
Why did Bitcoin rise more than US stocks?
Bitcoin was a bit interesting this week, rebounding from $85,000 to $95,000, rising even more sharply than US stocks.
From the data, Bitcoin is very closely linked with the S&P 500, but it is much more volatile.
When Bitcoin drops, it drops harder than US stocks, with a maximum drop of 32.5%, while the S&P only dropped 21.5%. When it rises, it rises more fiercely, it's like a roller coaster.
Data from exchanges shows that there wasn't a massive outflow of funds this week; investors are more inclined to hold long-term, believing Bitcoin is digital gold and not in a hurry to sell.
However, there is also considerable short-term pressure, as some people have started selling above $90,000, indicating that some want to take profits.
If next week's GDP data disappoints, Bitcoin may also be affected.
How will the market move next week?
The market rebounded well this week, and the fear and greed index also rose to 53, indicating a more optimistic market sentiment, allowing for a slight breather over the weekend.
But the GDP and earnings reports released next week are key!
On April 30, GDP data was released, and both Goldman Sachs and GDPNow predicted a very poor performance for the US economy in the first quarter, with growth possibly as low as 0.1% or even negative.
If the data is really this bad, worries about an economic recession may come back.
The market is betting that the Federal Reserve will cut interest rates in June, but the Fed is still focused on fighting inflation. Unless the US economy really falters, they won't easily lower rates.
If GDP data exceeds expectations, the market may continue to rise. But if the data is poor, fears of a recession may lead both US stocks and Bitcoin to pull back.
Overall, the global market was like a roller coaster this week, with the US-China tariff dispute being unpredictable. US stocks rose strongly due to tech stock earnings, and Bitcoin also rebounded sharply. Next week's GDP and tech giant earnings will determine the short-term trend.
