Forex Analysis & Reviews: 06.02.2025 - U.S. Stock Market Faces a...

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

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

06.02.2025 03:18 PM

U.S. Stock Market Faces a Difficult Year

According to a JPMorgan Chase & Co. study, this week's turmoil in global financial markets, triggered by a series of U.S. tariff announcements and trade restrictions, appears to mark the beginning of an unstable year. The bank's annual survey indicates that the biggest market drivers in 2025 will be inflation and protectionist tariffs, followed by geopolitical tensions. Around 41% of respondents cited volatility as the most pressing daily trading challenge, compared to 28% last year.

In 2025, inflation is expected to continue exerting significant pressure on global markets. Countries facing rising inflation rates will be forced to tighten economic policies—including raising or maintaining interest rates and cutting government spending—as key tools to combat price increases. These measures will likely affect consumer spending and investment activity, posing risks to economic growth.

Meanwhile, protectionist tariffs, introduced to shield domestic manufacturers, will reshape market structures. Such measures could raise import costs, further exacerbating inflation and reducing living standards. Moreover, they may provoke retaliatory actions from trading partners, escalating global trade conflicts.

"This year brings an unexpectedly volatile environment," the JPMorgan report states. "Markets are reacting to headlines in surprising ways, and this trend appears likely to continue."

Traders remain on edge due to the uncertainty surrounding the impact of tariffs on different asset classes. The annual survey of more than 4,200 institutional traders was conducted before U.S. President Donald Trump rattled global markets with a wave of trade tariffs. These concerns are expected to fuel currency trading, particularly in the Canadian dollar (CAD), Mexican peso (MXN), and offshore Chinese yuan (CNH), while also casting doubt on the continued upward trajectory of the U.S. stock market, including the S&P 500 and Nasdaq.

Tariffs, Inflation, and the Market Response

The risk that higher import prices could reignite inflation has persisted since Trump's election in November, dashing hopes that the Federal Reserve would pursue further rate cuts this year.

Following Trump's directive to impose 25% tariffs on all imports from Canada and Mexico, which he later postponed after leaders of both nations pledged stronger efforts to curb illegal immigration and drug trafficking, risk appetite briefly returned to financial markets. However, whether Trump will maintain his wait-and-see approach remains a key question.

Stock markets, including those in Asia, have also recovered. A broad 10% tariff on Chinese imports has already taken effect, yet Beijing's response has been relatively mild, fueling speculation that neither side wants to escalate a full-scale trade war.

S&P 500 Technical Outlook

Demand for the S&P 500 remains strong. The key objective for buyers today will be to break through resistance at $6,069. Achieving this would sustain the upward trend and pave the way for a push toward $6,079.

An equally important bullish target will be controlling $6,092, which would strengthen buyers' positions.

However, if the index pulls back due to declining risk appetite, buyers must defend the $6,058 level. A break below this level could push the index further down toward $6,047 and $6,038, opening the door to deeper corrections.

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.