Expectations of Fed rate cuts intertwined with concerns over the trade war have caused a temporary pause in the rise of U.S. stocks; Bitcoin long positions aim for $116,000.

On Friday (September 12), despite the market still hoping for a rate cut by the Fed, U.S. stock index futures fell in early trading, mainly influenced by renewed concerns about the global trade war. Mexico announced plans to raise tariffs on Chinese cars, triggering a warning from Beijing. Meanwhile, after solidifying its recent rise, the price of Bitcoin is testing a key resistance level, with its technical indicators showing bullish signals.

Concerns of Trade War Resurface, US Stock Market Rally Pauses

After hitting a historic high overnight, U.S. stock index futures edged lower in early trading on Friday. This pullback is mainly influenced by geopolitical and trade tensions.

Tariff Controversy: Mexico has announced plans to significantly increase the tariff on cars from China from 20% to 50%. The Chinese side responded quickly, warning Mexico to "be cautious and think twice," and stated that it would take "necessary measures to firmly safeguard its legitimate rights and interests." Since Mexico is an important hub for Chinese car exports to the United States, this move could be seen as a "proxy trade war" led by the United States.

High-level talks: U.S. Treasury Secretary Scott Bessent will meet with Chinese Vice Premier He Lifeng in Madrid to discuss issues such as trade, economy, and national security, indicating that dialogue between the two countries is warming up.

Market sentiment: Although traders had largely ignored such "proxy trade wars" previously, their escalation may affect market sentiment and put pressure on the stock market.

Fed Rate Cut Expectations and Economic Data

The market's focus is also on the Fed's monetary policy:

Interest rate cut probability: According to the latest CME FedWatch Tool data, the market's bets on a rate cut by the Fed in September remain strong, but the expectation for a 50 basis point cut has slightly decreased from 8.9% to 7.3%.

Consumer Confidence: The University of Michigan Consumer Confidence Index to be released today is a key data point. Although the preliminary expected data for September remains unchanged from August (58.2), if the final data falls below expectations, it may indicate a weakening in consumer spending, thereby supporting a more aggressive rate cut from the Fed.

Bitcoin Price Analysis: Consolidating Rise, Testing Key Resistance

(Source: TradingView)

Meanwhile, in the fluctuation of risk sentiment, the price of Bitcoin shows a relatively robust technical trend:

Price Dynamics: Bitcoin has started a new round of recovery from the $111,200 region, reaching a high of $116,298. Currently, its price is consolidating above $114,500 and is approaching the key resistance level of $116,200.

Technical indicators: The MACD on the BTC/USD hourly chart is accelerating in the bullish zone, while the RSI is also above the 50 level, indicating positive momentum.

Key price level:

Resistance level: If it can successfully break through 116,200 USD, the price may further test 116,800 USD or even 117,500 USD.

Support Level: On the downside, immediate support is near the bullish trend line at $115,000, with major support at $113,500 and $110,500.

Key Technical Levels of Major Stock Indices

Despite facing a decline in the early session, the technical outlook for major stock indices remains bullish in the short term, and market trends will depend on Fed decisions, trade progress, and recession risks.

Dow Jones Index: resistance level: 46,176, then 46,500. support level: 46,000, 45,500.

Nasdaq 100 Index: resistance level: 24,046, then 24,500. support level: 23,500, 23,285.

S&P 500 Index: resistance level: 6,600, followed by 6,750. support level: 6,500.

Conclusion

The global financial markets are at a complex crossroads, weighing traditional macroeconomic factors, dealing with geopolitical tensions, and focusing on the unique dynamics of the digital asset space. Upcoming key events in September, such as the Fed's interest rate decision and the progress of trade negotiations, will be crucial for both stock traders and cryptocurrency investors, as the outcomes will determine the next direction of the market.