Forex Analysis & Reviews: 02.04.2025 - The Market Needs Proof

Live Chat

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

02.04.2025 09:16 AM

The Market Needs Proof

It's too late to be afraid. Rumors are circulating in the market that the White House may implement a universal 20% levy instead of reciprocal tariffs—pushing the average import duty to its highest level since the 1930s and triggering a global economic shock. Yet, the S&P 500 remains surprisingly calm and resilient on the eve of America's "Liberation Day." Why? And how will the broad stock index react to the event of the year?

There are several explanations for the S&P 500's resilience. Investors are confident that Donald Trump won't go too far. He is unlikely to pursue a tariff policy so aggressive that it would threaten U.S. economic growth. Investors must see more signs of a cooling U.S. GDP to continue selling the broader index. Finally, greater clarity on import tariffs will reduce uncertainty, which is good for stocks.

S&P 500 Trends and Forecasts

It's no surprise that while major banks and firms are lowering their forecasts for the S&P 500, they still expect the index to rise by year-end. Yardeni Research now sees a target of 6000 by the end of 2025, down from 6400; Societe Generale forecasts 6400 instead of 6750; and Goldman Sachs lowered its outlook to 5700 from 6200.

UBS Wealth Management believes the worst will happen in the short term, but tariffs will gradually be rolled back by midyear amid negotiations and concessions from other countries. This would create ideal conditions for a renewed uptrend in the S&P 500 between July and December. That scenario seems plausible—but what if other nations don't bend to the White House's demands? They could redirect exports elsewhere, with the U.S. ultimately suffering.

Indeed, the experience of Trump's first trade war with China shouldn't be used as a template. Back then, Washington's allies were largely supportive, and fiscal stimulus helped supercharge the U.S. economy just before the tariffs were implemented. A key difference now is the significantly higher spike in trade policy uncertainty compared to eight years ago.

U.S. Trade Policy Uncertainty Index Trends

According to the U.S. administration, tariffs will take effect the day they're announced. The S&P 500's reaction will largely depend on the scale of those tariffs. Only across-the-board 20% levies are likely to shake the index. On the other hand, reciprocal tariffs targeting a group of countries could trigger a rebound in U.S. equities as investors rush to buy the dip.

From a technical perspective, the S&P 500 continues to form a Double Bottom pattern on the daily chart. A breakout above the 5670 resistance level would provide an opportunity to build long positions opened during the drop toward the lower end of the 5500–5790 trading range. Conversely, if bulls fail to break through fair value resistance, it would signal weakness.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.