Forex Today: S&P 500 Trades Below “Trump Open”

By Adam Lemon Created on January 14, 2025

The major US equity index the S&P 500 briefly traded below its closing price the day before President-Elect Trump’s election victory, raising fears about the long-term health of the stock market.

The S&P 500 index yesterday fell quite strongly to trade below the closing price just before the Trump / Republican election victory, which was a significant milestone that rattled markets due to talk from within the Trump transition team to the effect that the planned tariffs could be implemented gradually, along with rising long-term US Treasury Yields. Stock markets rallied late, but that benchmark will be important to the Trump administration, which has a history of measuring its success by the stock market. However, we are still well within a bull market in US equities.
Yesterday saw the first day in almost one weak where the US Dollar lost value, although it remains close to fresh 2-year highs. Most currency pairs involving the US Dollar have recently hit multi-year highs or lows depending upon the Dollar’s side of the pairing. The 10-Year US Treasury Yield closed Friday above 4.75%.
The Bank of Japan’s Deputy Governor strongly hinted at the chance of a rate hike at the bank’s policy meeting next week, stating rates will be raised when the “economic outlook is realized.” This has helped boost the Japanese Yen a bit, which has been holding its own in recent days even when the US Dollar is strong.
The Forex market is in focus due to the strong movement in the US Dollar. Trend traders will remain interested in being short of the the EUR/USD currency pair. Since today’s Tokyo open, the strongest currency has been the New Zealand Dollar while the weakest currency has been the Japanese Yen.
Corn futures closed yesterday at a new 1-year high and will attract interest from trend traders on the long side. Some analysts might argue that in the current strong USD environment, there is a tailwind against commodity advances.
The US 10-Year Treasury Yield a new 1-year high yesterday and will attract interest from trend traders on the long side. Some CFD brokers offer this to traders, and micro futures are available on the CME.
There will be a release of US PPI data later today, which will be important as it is a key inflation indicator, and US CPI data will be released tomorrow. PPI is expected to show a month-on-month increase of 0.4%.

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