FX.co ★ US Market News Digest on January 19

S&P 500 continues to decline amid rotation and rising yields

The S&P 500 remains on a downward trajectory — capital rotation and rising US Treasury yields are putting pressure on the market. Investors are increasingly reallocating funds out of riskier assets, intensifying pressure on equity indices and especially on sectors sensitive to interest rates.

An additional risk factor is the potential introduction of new tariffs by Donald Trump. If implemented, such measures could accelerate the market's decline and hit small?cap companies particularly hard, as they are typically more vulnerable to deteriorating trade conditions and rising costs.

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Volatility rises: tariff threats and tensions with Europe weigh on market

The US equity market has entered a phase of elevated volatility and may finish the week in negative territory. The main pressure stems from tariff risks and heightened tensions between the US and European countries. Against this backdrop, investors prefer to act more cautiously and reduce equity allocations in portfolios.

If the tariff agenda develops further, the market could face unpleasant consequences: higher consumer prices for goods imported from Europe, more expensive logistics, and increased costs for businesses. This creates additional stress for companies and could weaken profit expectations for upcoming quarters. Follow the link for more details.

US dollar weakens amid tariff risks and Fed uncertainty

The US dollar is under pressure as tariff threats intensify and geopolitical tensions with the European Union rise. These factors increase uncertainty for investors and prompt closer scrutiny of the outlook for the US economy and foreign trade.

Additional instability is created by expectations of possible changes in Fed leadership. Amid such rumours, the dollar's appeal as a safe?haven weakens, which may support demand for alternative currencies and defensive assets.

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