Week 9 trading news roundup
By Paul Reid
If you’re just looking at the headlines, you’re already behind. To trade effectively, you need to understand what’s really happening beneath the surface—and more importantly, what’s coming next. Let’s break it down.
The Fed’s dilemma: Inflation and the core PCE Price Index
The US Core PCE Price Index came in hot, reminding everyone that inflation isn’t going away quietly. This puts the Federal Reserve in a tough spot: ease off and risk inflation creeping back, or keep rates higher for longer and risk breaking something in the economy.
For traders, the implications are clear. If inflation remains sticky, expect the Fed to hold rates or even push another hike—bullish for the dollar, bearish for equities, and a potential play on Fed Funds futures. Watch two-year Treasury yields; if they keep rising, stocks will struggle. But if bond yields start to crack, it could be the first sign the market is calling the Fed’s bluff.
Alphabet’s earnings: The AI bubble grows
Alphabet’s 11.9% year-over-year revenue jump sent tech bulls into overdrive. AI remains the golden goose, and traders should take note. Nvidia, AMD, and AI-focused ETFs could see further upside, but be wary—when everyone is on the same side of a trade, the exit can get crowded fast.
If AI optimism keeps running, the Nasdaq has more room to climb. But if a reality check sets in (like a major AI firm missing earnings), expect a sharp correction. Watch volatility indexes on the Nasdaq—if they spike while tech rallies, smart money is hedging.
Bank of England rate cuts: A canary in the coal mine?
The Bank of England’s rate cut should set off alarm bells. If the UK is easing rates while the Fed holds firm, the pound is in trouble. Sterling's two-month high may not last if more cuts are coming.
Traders should be watching GBPUSD closely—if UK inflation data shows further cooling, expect the pound to weaken. Shorting the pound against a strong US dollar might be one of the cleaner trades in the coming weeks.
Australian CPI: A surprise hawkish shift?
Australia’s CPI data came in strong, and the Reserve Bank of Australia might have to rethink its next move. If inflation remains stubborn, the RBA could be forced into more rate hikes, which would strengthen the Australian dollar. AUDUSD is the play here—if US data softens while Aussie inflation remains firm, a breakout is on the table.
Trump’s tariff threats: The wild card
Just when global trade was settling, Trump’s tariff rhetoric came roaring back. If tariffs escalate, it’s not just China that’s affected. Mexico, Canada, and even US consumers could feel the squeeze. Supply chains are already fragile; more tariffs could send commodities and emerging market currencies into chaos.
Traders should keep an eye on the Chinese yuan and Mexican peso. If tensions escalate, shorting the yuan or going long on commodities like copper and silver could be profitable plays.
Gold’s rally: Fear is creeping In
Gold hitting record highs isn’t just about inflation—it’s about uncertainty. Geopolitical tensions, trade wars, and central banks hoarding gold all point to one thing: big players are preparing for turbulence. If this continues, silver and platinum won’t be far behind.
Gold miners and silver ETFs are worth watching. If gold breaks to new highs, don’t be surprised if silver and platinum play catch-up. Also, if central banks are still buying aggressively, ask yourself why. What do they see coming?
Nasdaq surge: AI hype or the next big short?
AI stocks are leading the charge, and the Nasdaq is riding the wave. But here’s the question: is this another dot-com bubble in the making? Big Tech is looking unstoppable, but when everyone piles into the same trade, cracks appear.
Watch for unusual options activity. If institutions start loading up on puts while retail investors keep buying calls, you’ll know the pros are setting up for the next move down.
US GDP and the Fed’s next move
A strong Q4 GDP print gave bulls a reason to cheer, but don’t get comfortable. If growth stays strong and inflation is still high, the Fed’s ‘higher for longer’ stance gets more credible. That means rate cuts get pushed further out, and bond yields rise.
If GDP stays hot, the Dow and S&P 500 might struggle. But if we see weakness creeping in, expect a shift into defensive plays like utilities and healthcare.
Chinese PMI: The signal no one’s watching
China’s PMI numbers showed resilience, but is the recovery real? If China’s economy rebounds, emerging markets will benefit. If it’s just another case of manipulated data, we could see another downturn.
Keep an eye on Asian ETFs and commodities like iron ore. If China’s demand is real, these assets should move higher.
Conclusion
This market isn’t about blindly following headlines—it’s about reading between the lines. The Fed is stuck, AI is euphoric, gold is whispering warnings, and global trade could be on the edge of another war. If you're feeling hesitant about the market's next move, don't rush into a trade. Instead, step back and test your ideas with a risk-free demo account. It's a safe way to explore the markets without the fear of losses, allowing you to refine your strategy before using real funds.
keep your Exness Trade app open to get notified about major changes, no matter where you are, and make sure the Exness blog homepage is in your favorites to catch the next deep dive forecast.
This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.
Author:
Paul Reid
Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.