Forex Analysis & Reviews: 24.02.2025 - US stock market takes...

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

24.02.2025 03:19 PM

US stock market takes nosedive

The animal spirits that propelled the S&P 500 up by 50% over the past two years are now taking on a global character. The capital shift from North America to Europe and Asia appears to be just beginning. The loss of the US stock market's exclusivity and signs of weakening consumer demand triggered the worst one-day decline in US equities since mid-December.

Global stock market trends

For a long time, the S&P 500 served as a safe haven for capital. The US economy demonstrated remarkable resilience against the Federal Reserve's aggressive monetary tightening, while the AI-driven boom made investing in the Magnificent Seven a no-brainer. Fears surrounding Donald Trump's tariff threats further boosted demand for US-issued securities.

However, as it became increasingly clear, the White House's tariff threats were merely part of negotiation tactics. So, as US high-tech giants faced growing competition from overseas, the market flipped upside down. Money began flowing out of North America at roughly the same pace it had rushed in during 2023–2024.

At the same time, the declining US dollar made foreign assets more attractive. Chinese stocks, for example, with a P/E ratio of 15, appear significantly cheaper than their US counterparts, which are trading at a P/E of 22.

Asian stocks and the US dollar

The rush to exit US markets is also fueled by signs of impending stagflation. Consumer confidence (University of Michigan) has plunged. Business activity in the services sector has contracted for the first time in two years. Inflation expectations have surged to their highest level since 1995. These signals point to an economy losing momentum while inflation risks accelerate. Chicago Fed President Austan Goolsbee attempted to calm the markets, stating that one report won't dictate policy decisions. However, investors chose to hit the sell button instead.

The market sentiment has shifted

Previously, bad news for the US economy was good news for the S&P 500, as it fueled expectations of a more dovish Federal Reserve. Now, bad news only fuels corrections.

Likewise, earlier speculation about lower-than-expected Trump tariffs supported the broad stock index, while now, such reports boost its foreign competitors. The Magnificent Seven are no longer market leaders—investors are actively seeking alternatives.

Strategic outlook

These shifts create an opportunity to implement paired trading strategies, simultaneously shorting the S&P 500 and buying its counterparts in Germany, Europe, or China—at least until mid-March, when the market starts pricing in the April 2 reciprocal tariff measures.

From a technical viewpoint, the daily chart of the S&P 500 is forming a broadening wedge reversal pattern. Shorts from 6,083 should be maintained and periodically increased.

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.