Last week once again confirmed that President Trump is by far the most powerful catalyst for financial markets. No set of economic data or quarterly report of any company can move markets as much as the scandalous decisions made by the leader of the free world. And given that he has a lot of power and energy, the amplitude of market fluctuations is simply amazing: several trillion dollars up or down in one day, almost every day, which creates excellent opportunities for earnings. However, this applies only to experienced traders; non-professionals should resist the temptation to make quick money on fluctuations and wait until the market determines its direction. The only question is how long to wait and whether it will go up or down? This is a quick review from Ivan Kompan, Edinburgh Business School analyst.
This week, the White House showed the world its skill at backpedaling. First, at a private JP Morgan conference, Treasury Secretary Scott Bessent hinted that the U.S.-China situation was “unstable,” suggesting a possible shift in government attitudes. Shortly after, Trump publicly stated the U.S. would “be nice to China” and that the 145% tariff was “too high” and would be reduced. Markets rallied on the news, rewarding those who invested early. While it looked like classic insider trading, it’s up to the SEC to investigate.
China seemed to appreciate the softening. On Thursday, rumors surfaced that Beijing might delay a recently imposed 125% tariff on some U.S. goods. Trump claimed negotiations were progressing well but refused to disclose any details. Meanwhile, Chinese officials insisted no talks were happening and rejected any pressure. Thus, Trump’s “blitzkrieg” has morphed into a drawn-out conflict, unlikely to boost long-term market optimism.
Corporate news also lifted sentiment. On Tesla’s earnings call, Elon Musk promised to spend less time in Washington and focus more on Tesla, cheering investors despite the company’s poor Q1 results — missed forecasts, declining revenue, falling margins, and no new models, just promises. Meanwhile, Alphabet genuinely impressed: better-than-expected earnings, a 5% dividend increase, and a $70 billion share buyback program. Oddly, investors showed more enthusiasm for Musk’s promises than Alphabet’s strong fundamentals — a clear sign that in today’s markets, soft skills often outweigh hard numbers.
In the short term, the week ended positively. But uncertainty looms. Deutsche Bank cut its year-end S&P 500 target from 7,000 to 6,150 — the 11th downward revision this year. While December forecasts ranged from 6,400–7,100, now they’re at 5,200–6,150. The reason: if tariffs persist, corporate earnings will suffer significantly. As the IMF warned this week, global growth is slowing and risks are rising with ongoing political turbulence. Last week’s rally might just be a “bull trap” before further market declines.
*And finally, we would like to remind you that the information you have just listened to is not an investment advisory. Remember – investments in the stock market are always tied up with financial risks. So be careful and cautious.
