On May 5, 2025, US markets showed slight profit-taking, particularly after the longest winning streak of the S&P 500 in over 20 years. This development was influenced by several factors:
1. Profit-Taking After A Long Winning Streak
- The S&P 500 had achieved an impressive winning streak, prompting investors to take profits. This profit-taking was intensified as positive news in the trade dispute was largely priced into the markets.
- The Dow Jones initially showed slight losses but gained slightly over the course of the day, while the S&P 500 and Nasdaq Composite recorded minor losses.
Trade Dispute and Economic Assessments
- US President Donald Trump and his advisors seemed less concerned about the economic situation, leading to speculation that the Trump administration could take a firm stance in the tariff dispute.
- This development could put further pressure on the markets as investors watch for a potential escalation in the trade dispute.
Fed Decision in Focus
- The two-day meeting of the Federal Reserve, which began on Tuesday, was the center of attention. The Fed’s interest rate decision, expected mid-week, was of significant importance to the markets.
- Analysts expect the Fed to keep interest rates stable, which would be seen as a confirmation of the current interest rate level. A different decision would be perceived as a surprise.
- The statements from Fed Chair Jerome Powell are particularly noted, as US President Trump has previously called for interest rate cuts and even supported this with threats.
Further Market Developments
- The gold price rose by 2.8 percent to $3,330 per ounce, supported by a weakness in the US dollar.
- These developments show that the markets continue to react sensitively to economic policy decisions and geopolitical tensions.
For individual investors and retail investors, these developments are of great interest as they can influence short-term market opportunities and risks. A stable interest rate decision by the Fed could enhance confidence in the markets, while an escalation of the trade dispute could create uncertainty.