empty
22.05.2025 09:49 AM
Changes in the U.S. Tax System May Exert Localized Pressure on Market Demand (there is a likelihood of a decline in #SPX and gold prices)

The chaos and instability caused by Donald Trump, both in the U.S. and around the world, have become a regular occurrence. However, they still contribute to significant market volatility, and this situation shows no signs of improvement.

The U.S. stock market fell sharply on Wednesday amid a surge in Treasury yields and concerns over changes in fiscal policy proposed by the U.S. president. These developments significantly affected investor sentiment and halted the growth of domestic equity indices.

Long-term bond yields spiked after a weak auction of $16 billion in 20-year Treasury bonds, with the yield on 30-year Treasuries rising to around 5% — the highest since 2023. The benchmark 10-year government bond yield reached a local April high. All of this unfolded in the context of a proposed tax and spending bill that could further widen the federal budget deficit.

Naturally, these developments and movements in the bond and equity markets had a negative impact on the dollar, which, according to its index, fell below the 100-point mark and continued to decline almost vertically during the morning session. Japanese Finance Minister Kato stated that he had not yet discussed exchange rates with U.S. Treasury Secretary Bessent during the G7 meeting in Canada. Meanwhile, reports have emerged that the U.S. is pressuring South Korea to introduce measures to strengthen the won. These reports indicate that the U.S. is interested in weakening its national currency to stimulate the international trade of American companies.

The only beneficiaries of this market turmoil were gold and cryptocurrencies, which have risen noticeably amid heightened volatility and general uncertainty over the outlook.

The internal disarray within the Trump administration and the desire to preserve everything without making any sacrifices will only worsen the situation in America and the markets. Under such conditions, the Federal Reserve is unlikely to decide on a rate cut in the near future but will continue to feed the markets with hope, which may partially contain a potential collapse.

What can be expected in the markets today?

The U.S. stock market will likely continue to decline due to the ambiguous situation surrounding the new tax law. The dollar may also keep falling in the Forex market under the pressure of domestic turmoil. This generally negative picture may pause gold price growth and reduce local demand for cryptocurrencies.

This image is no longer relevant

This image is no longer relevant

Daily Forecast

Gold

Gold prices are trading in a short-term downtrend and may locally rise to its resistance line at 3358.50. Failure to break above this level could serve as a basis for a price reversal and a renewed decline toward 3200.00. A potential level for selling the pair could be 3349.51 or a simple market sell.

#SPX

The CFD contract on the S&P 500 futures remains under pressure and is trading near 5854.45. Continued negative market sentiment may lead to a renewed decline toward 5756.40. A potential level for selling the pair could be 5830.23.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Viktor Vasilevsky
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

XAU/USD. Analysis and Forecast. Gold is supported by moderate USD weakness and trade-related uncertainty

Today, gold is trading higher, remaining within a sideways trend. Late Thursday, Federal Reserve official Christopher Waller stated that rising risks to the economy could justify a key rate

Irina Yanina 19:15 2025-07-18 UTC+2

AUD/USD. Analysis and Forecast

Today, the AUD/USD pair climbed above the key psychological level of 0.6500, attempting to confirm its recent positive momentum. The main driver behind the Aussie's rise is the weakening

Irina Yanina 13:49 2025-07-18 UTC+2

USD/CAD. Analysis and Forecast

Today, Friday, the USD/CAD pair is pulling back from a three-week high near 1.3775 recorded yesterday. At the moment, prices are trading slightly below the 1.3730 level, showing a modest

Irina Yanina 13:38 2025-07-18 UTC+2

The European Central Bank May Postpone Its Rate Cut Until December

While the euro attempts to stage a correction against the U.S. dollar, a survey of economists suggests that the European Central Bank may delay its final interest rate cut until

Jakub Novak 11:37 2025-07-18 UTC+2

Powell Responds to White House Criticism

Lately, Federal Reserve Chair Jerome Powell has faced increasing pressure, coming under fire from lawmakers, the White House, and U.S. President Donald Trump. In a letter sent on Thursday, Powell

Jakub Novak 11:26 2025-07-18 UTC+2

The U.S. Begins Regulating the Digital Currency Market (Potential for a Correction in Bitcoin and EUR/USD)

The U.S. House of Representatives has passed bills establishing the first federal framework for dollar-backed stablecoins and setting regulations for other digital currencies. The idea of regulating the cryptocurrency market

Pati Gani 09:28 2025-07-18 UTC+2

The Market Favors a Weak Dollar

What could be better for the S&P 500 than a Federal Reserve rate cut amid a still-strong economy? A series of positive labor market and retail sales data, combined with

Marek Petkovich 09:28 2025-07-18 UTC+2

What to Pay Attention to on July 18? A Breakdown of Fundamental Events for Beginners

Several macroeconomic reports are scheduled for release on Friday, but none of them are of major importance. The only noteworthy release is the University of Michigan Consumer Sentiment Index

Paolo Greco 06:13 2025-07-18 UTC+2

GBP/USD Overview – July 18: Is the Market Tired of the Dollar and Trump?

The GBP/USD currency pair once again leaned toward decline on Thursday. After the British pound strengthened on Wednesday evening following another report about Powell's dismissal, the dollar quickly recovered. However

Paolo Greco 03:56 2025-07-18 UTC+2

EUR/USD Overview – July 18: Trump Will Keep Trying to Fire Powell for Another Year

The EUR/USD currency pair continued its steady decline throughout Thursday. As a reminder, the forex market experienced an "explosion" on Wednesday evening. Donald Trump once again attempted to either fire

Paolo Greco 03:56 2025-07-18 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.