empty
28.01.2025 09:50 AM
Panic Triggered by DeepSeek News is Overestimated (Potential Rebound of S&P 500 CFD and Rise in Gold Prices)

Recent news from China regarding DeepSeek's advancements in artificial intelligence has triggered a significant drop in the shares of major tech companies in both Europe and the United States. This decline has raised concerns about America's technological dominance. Amid this uncertainty, investors have become increasingly risk-averse, leading to a surge in demand for government bonds in developed economies.

The breakthrough in Chinese AI technology has dealt a serious blow to the U.S. AI program introduced just a week ago by Donald Trump. In response to this disappointment, market participants began actively selling shares of companies such as Nvidia, Microsoft, and others. The sell-off quickly turned panic-driven, with investors seeking to hedge against high volatility, as indicated by the "fear index" (VIX). This resulted in increased purchases of U.S. Treasuries, which caused a sharp drop in yields.

Previously, the U.S. dollar had fallen below the 108.00 level on the ICE index but gained strength due to the rising demand for Treasuries. The dollar had shown growth in anticipation of Trump's economic reforms, including potential tariffs, and expectations of rising inflation in the U.S., which made further rate cuts seem unlikely. However, the increasing uncertainty stemming from mixed signals from the new administration has recently weighed on the dollar's performance.

As the Federal Reserve begins its two-day meeting today, the U.S. dollar is starting to recover its standing in the Forex market.

According to the dynamics of federal funds rate futures, the market predicts a 97.3% chance that the Federal Reserve will keep monetary policy unchanged, despite former President Trump's calls for further rate cuts. This expectation is unlikely to significantly impact the market, as it has already accounted for this possibility. Any major changes would only arise from unexpected statements by Federal Reserve Chair Jerome Powell, although no big surprises are anticipated. Powell's press conference is expected to reaffirm the Fed's current pause in rate decisions, emphasizing the risks of inflation and the uncertainties surrounding Trump's presidency.

Regarding the stock market, the panic observed on Monday seems excessive and driven by emotion. A recovery in demand for U.S. equities, as well as for cryptocurrencies, is anticipated. The economic policies of the 47th president are expected to bolster domestic economic growth and manufacturing, particularly in light of Europe's stagnation and rising tensions with China.

Forecast of the Day

This image is no longer relevant

This image is no longer relevant

#SPX

The S&P 500 futures CFD has partially recovered from yesterday's decline, which was influenced by news about DeepSeek's achievements. There is a possibility that the contract will continue to rise towards 6100.00 after consolidating above 6000.00.

GOLD

The price of gold has stabilized above 2735.20. Weakness in the dollar could lead to an increase in the price to 2662.00.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
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

The Market Has Turned Everything Upside Down

Is the worst behind us? As the S&P 500 surged to a three-week high amid easing tariff threats from Donald Trump, banks and investment firms rushed to the bulls' side

Marek Petkovich 08:18 2025-03-25 UTC+2

What to Pay Attention to on March 25? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic events are scheduled for Tuesday, and none are of significant importance. At best, the German business climate report and U.S. new home sales data can be mentioned

Paolo Greco 06:30 2025-03-25 UTC+2

GBP/USD Pair Overview – March 25: The Pound Rises Before It Even Wakes Up

On Monday, the GBP/USD currency pair again showed upward movement. The pound sterling began rising overnight despite no clear reasons or fundamental drivers. Yet the market on Monday clearly demonstrated

Paolo Greco 04:02 2025-03-25 UTC+2

EUR/USD Pair Overview – March 25: The Euro Continues to Creep Downward in a Correction

The EUR/USD currency pair showed relatively low volatility on Monday. However, looking at the chart below, it becomes clear that volatility hasn't been high recently—aside from a few days several

Paolo Greco 04:02 2025-03-25 UTC+2

EUR/USD: PMI Indices and WSJ Insider Reports

On Monday, EUR/USD traders concentrated on factors that benefitted the U.S. dollar, while negatively impacting the euro. Insider reports from U.S. media concerning the "April 2 tariffs" supported the pair's

Irina Manzenko 00:00 2025-03-25 UTC+2

USD/JPY. Analysis and Forecast

At the start of the week, following the release of a weaker Japanese PMI, the yen came under pressure. This, combined with news of narrower and less aggressive retaliatory tariffs

Irina Yanina 13:20 2025-03-24 UTC+2

XAU/USD. Analysis and Forecast

Today, gold prices remain low but are holding above the psychological level of $3000, which serves as an important support. News that emerged over the weekend indicates that U.S. President

Irina Yanina 10:25 2025-03-24 UTC+2

The Market Fell Into a Pit It Dug for Others

What drives the markets? Fear? Greed? At the moment, disappointment is far more significant. Investors are realizing that Donald Trump's tariff policy will not lead to anything good

Marek Petkovich 09:23 2025-03-24 UTC+2

Markets Are Tired of Falling. Investors Look for Growth Triggers (CFD contracts on #SPX and #NDX futures may rise on positive U.S. economic data)

Global financial markets continue to swing back and forth amid uncertainty over the actual impact on the economies of various countries targeted by Donald Trump's tariff hikes, which have prompted

Pati Gani 09:23 2025-03-24 UTC+2

EUR/USD Weekly Preview: PMI and IFO Indices, U.S. GDP, and Core PCE Index

The upcoming week's economic calendar is packed with important fundamental events. Macroeconomic reports will either help EUR/USD sellers consolidate within the 1.07 range or enable buyers to hold above

Irina Manzenko 06:52 2025-03-24 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.