This brings us to a potential tipping point in the United States’ ongoing trade negotiations with the European Union pair. Just today, the US President delayed his threat to impose 50% tariffs on imports from the EU. This is precisely the decision that the President of the European Commission had asked for. Yet, it shows the lack of a meaningful, comprehensive tariff progress with the EU. The US has previously executed similar agreements with the United Kingdom and more recently, China. Despite these successful confrontations—possibly emboldened by them—European bureaucratic intransigence continues to anger the President.
The lack of progress on tariff negotiations with the EU has alarmed financial markets. The President’s decision to delay the tariffs was a momentous step towards alleviating market fears and restoring investor faith. If the positive trade signals don’t stop, some analysts are looking for the S&P 500 index to climb back up toward record highs. They recently revised their price target upward to a range of 6100-6150, suggesting upside of 4-4.5%.
Though the forecast remains bright, the slow-moving nature of negotiations has been maddening for the US President. An unusually turbulent market The current market climate has shifted dramatically amid increased volatility, including new records in day-to-day swings in the S&P 500 index. After the announcement about new tariffs on Friday, the index fell below 5800, contributing to a lot of uncertainty already in place.
Market analysts do not foresee four interest rate cuts by the end of the year. This comes to show a more prudent attitude in the future. Over the last four weeks, sentiment soured quickly across the markets. Upon hearing this news, investors surged in pricing the next key rate cut all the way out to September.
On May 12th, the S&P 500 protected itself just above a major financial indicator’s psychological barrier. This level unambiguously distinguishes a bullish market from a bearish one. This line of support has turned out to be the most impactful for investors looking to sail through these choppy waters. As recently as just under a week ago, the index was beginning to tumble. This steep fall points to deepening investor concerns as trade war initiatives continue to roll out.
From a technical standpoint, market analysts have identified the first technical line of resistance for the S&P 500. It is appearing to be focused more on that 6000 circle. This level is crucial, to be sure, as it marks the index’s final high water mark before this summer’s drops began. All market participants are closely watching the negotiations and will plan accordingly. They want assurance that new trade partnerships aren’t going to drain away lucrative domestic economic opportunities.