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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

​​​NASDAQ 100, Tesla and DWAC euphoria fades as Trump victory rally loses steam​

​​Global markets retreat from post-election highs as surging US bond yields and inflation concerns dominate sentiment and as Trump's cabinet picks raise questions about US-China relations.​

Watching trading charts Source: Adobe images

​​​US stock markets retreat as bond yields surge

​The initial euphoria following Trump's victory has given way to caution as US Treasury yields surge, prompting investors to reassess their positions. This shift in sentiment has led to so far slight declines across major indices with some stocks taking the brunt.

​Technical trading signals indicate mounting pressure on key benchmarks. The S&P 500 has slipped below the psychological 6,000 level, while the Dow Jones has retreated beneath 44,000 while the NASDAQ 100 only dipped by 0.17% on Tuesday and thus remains above the 21,000 mark.

​Market participants are particularly focused on today's US inflation reading, which has added another layer of uncertainty.

​The Russell 2000, often seen as a barometer for domestic economic sentiment, has experienced a sharper decline of 1.77% as the 'Trump trade" momentum wanes. This suggests growing scepticism about the future impact of proposed policies.

​US stock indices comparison 5-day candlestick chart

US stock indices comparison 5-day candlestick chart Source: TradingView.com
US stock indices comparison 5-day candlestick chart Source: TradingView.com

Cabinet speculation impacts market sentiment

​Trump's potential cabinet appointments have drawn significant attention, with several Fox News personalities and political allies being considered for key positions. These choices could signal significant policy shifts.

​The spread betting markets have responded to speculation about Peter Hegseth for defence secretary and Marco Rubio for secretary of state, reflecting uncertainty about future policy direction.

​Notable appointments include Elon Musk and Vivek Ramaswamy to head a new Department of Government Efficiency, suggesting a focus on streamlining bureaucracy. This has implications for various market sectors.

​The potential appointment of China hawks to key positions has particularly affected sentiment towards Chinese equities, with mainland indices struggling to maintain momentum as investors worry about a potential 60% tariff being imposed on some Chinese goods.

Technology sector feels the pressure

Tesla's share price has experienced a significant 6% decline, reflecting broader market concerns and uncertainty about Musk's potential government role. This has to be put in perspective, though, since the Tesla share price rallied by over 40% within a week and only filled in its Veterans Day price gap. This is normal market behaviour.

​Tesla daily candlestick chart

Tesla daily candlestick chart Source: TradingView.com
Tesla daily candlestick chart Source: TradingView.com

​A further slip towards the $300.00 for the Tesla share price may short-term be on the cards, especially if US Treasury yields continue to rise, but the long-term uptrend will technically remain in place as long as the early November low at $238.88 underpins.

​Nonetheless, the share trading sector has seen increased volatility.

​Digital World Acquisition Corp (DWAC), closely tied to Trump's media ventures, saw its shares drop by nearly 9%. This suggests investors are reassessing their positions in Trump-related investments, at least in the short-term.

Trading platform data shows increased activity in technology stocks, as traders adjust their positions in response to the changing political landscape.

​These movements highlight the complex relationship between political developments and market performance, particularly in the technology sector.

Bond market implications

​The reopening of the bond market has seen a notable rise in Treasury yields, reflecting changing expectations about fiscal policy and inflation. The online trading community is closely monitoring these developments.

​US 10-year treasury yield daily candlestick chart

​US 10-year treasury yield daily candlestick chart Source: TradingView.com
​US 10-year treasury yield daily candlestick chart Source: TradingView.com

​Market participants are bracing for the US consumer price index (CPI) reading, which could further influence yield movements. This has implications for both equity and fixed-income strategies.

​The CFD trading markets have seen increased activity as traders position themselves for potential volatility.

​Higher yields typically pressure growth stocks and could impact market dynamics in the coming weeks.

How to trade market volatility

  1. ​Research current market conditions and understand the factors driving volatility

  2. ​Choose whether you want to trade or invest

  3. Open an account with us to access global markets

  4. ​Search for opportunities in our platform or app

  5. ​Place your trades while managing risk carefully

​These market movements demonstrate how political developments can create both opportunities and risks for traders. The key is maintaining a disciplined approach while staying informed about market-moving events.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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