Forex Analysis & Reviews: 27.02.2025 - The Market Lacks Momentum

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

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

27.02.2025 10:49 AM

The Market Lacks Momentum

NVIDIA's earnings report lacked the necessary spark, and the S&P 500 plunged after an initial rally. Meanwhile, Donald Trump's threat of imposing 25% tariffs on the European Union and the potentially severe consequences of the U.S.-China trade war could pose a much greater threat to the American economy than currently anticipated.

NVIDIA is viewed as a symbol of artificial intelligence (AI) technology, one of the key drivers that helped the S&P 500 rally by over 20% in 2023 and 2024. In Q4 2024, the tech giant's revenue surged by 78% year-over-year, reaching $39.3 billion. The January-March 2025 revenue forecast of $43 billion also exceeded Wall Street estimates.

NVIDIA's Quarterly Revenue Growth

One would expect NVIDIA's stock to continue its rally, but instead, it pulled back after an initial surge. Investors were concerned that revenue only exceeded consensus estimates by $1.2 billion—the smallest margin since the AI boom began in early 2023. Additionally, NVIDIA warned that its new product lineup—the Blackwell family of AI chips and full-fledged computing systems—would weigh on gross margins for most of 2025.

Investors were also alarmed by Donald Trump's announcement that the White House is considering imposing 25% tariffs on the European Union. Brussels has repeatedly stated that it has a list of retaliatory measures ready. A full-scale trade war between the U.S. and Europe would deal a severe blow not only to global trade and the economy but also to financial markets.

Furthermore, the consequences of U.S. protectionist policies against China may be far worse for the U.S. than currently expected. The issue lies in discrepancies between trade statistics.

According to U.S. data, from 2018 to 2024, the share of imports from China fell from 21.6% to 13.4%, and the trade volume dropped from $503 billion to $439 billion.

However, Chinese data indicates that exports to the U.S. only declined by 2.5 percentage points, while the total trade volume actually increased by $91.2 billion to $524 billion.

This discrepancy may be due to shipments under $800, which are currently exempt from U.S. tariffs. If these shipments are taxed, inflation in the U.S. could accelerate even further.

As a result, the Federal Reserve may be forced to keep the federal funds rate at 4.5% for longer than the market expects. Atlanta Fed President Raphael Bostic believes that the Fed is exactly where it needs to be, and with the central bank's employment targets met, its focus can now shift fully to inflation—a negative development for the stock market.

Technical Outlook for S&P 500

From a technical standpoint, on the daily chart, the S&P 500's retracement to 6,000—the 38.2% Fibonacci level from the 4-5 wave formation—provided an opportunity to increase previously opened short positions from 6,083.

These short positions should be maintained, with target levels at 5,830 and 5,750, marking potential low points for the broad stock market index.

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.