Cooling Momentum: Indices Hesitate After Trump-Fueled Rally

Hello traders, welcome to Friday and the start of the European session. After the whirlwind of market moves this week, Thursday offered a moment to catch our breath — though not without its own twists.

Thursday was mostly about digestion. Markets needed to absorb the aftershocks of Wednesday’s explosive rally, which followed Donald Trump’s surprise tariff pause and his now-famous “great time to buy” post. With that initial euphoria fading slightly, Thursday brought some reality back into play. Indices corrected modestly after their massive gains, and we saw a shift toward more balanced price action.

In terms of macro data, the focus was on inflation. Both the U.S. and China posted weaker-than-expected CPI prints. Inflation in China dipped below zero once again, reflecting ongoing deflationary concerns. Meanwhile, U.S. CPI came in softer than anticipated, fueling speculation about the Fed’s next moves, but surprisingly, the dollar held its ground after an initial dip.

Despite the softer inflation data, gold managed to stabilize and even push higher, continuing its impressive momentum. Silver also held strong, though some of the industrial metals like copper and platinum saw more hesitation.

On the currency front, the biggest development was continued weakness in the U.S. dollar and British pound. The Swiss franc emerged as the week’s clear leader, supported by both safe haven flows and its technical breakout.

As for Friday’s open, European indices are struggling to maintain momentum. The DAX, in particular, is showing signs of fatigue after trying to keep up with Wall Street’s rally. Futures across Europe are flashing red, and sentiment is cautious. U.S. futures are flat to slightly lower after yesterday’s pullback, as traders wait for the final key numbers of the week: U.S. PPI and University of Michigan consumer sentiment.

So far, it looks like Friday is starting on a quieter, more tentative note — but as this week has proven, that can change fast. Stay sharp, and keep an eye on the key support levels that were tested earlier in the week. They may be back in play if the bulls lose their footing.

Source: https://www.axiory.com/analytics/market-news/cooling-momentum-indices-hesitate-after-trump-fuel