Donald Trump has emphasized that the Federal Reserve should stay independent. He confirmed Miran’s appointment as a Governor for the FOMC. Trump also pointed out that Hamas using hostages as human shields would have serious consequences, indicating his support for Israeli actions in Gaza. He claimed that tariffs are bringing trillions of dollars into the US economy. Trump is preparing to announce a TikTok deal, suggesting a potential buyer. He highlighted that the EU spends $950 billion yearly, Japan $650 billion, and that China is responsible for about 55% of tariffs. He suggested that a Supreme Court victory for the US could make it the richest nation, thanks to trillions in tariff revenue.

Peace Talks and European Oil Purchases

Trump mentioned the importance of peace talks involving the Russian and Ukrainian presidents, urging a resolution from Zelenskyy. The US has also pressured Europe to stop buying oil from Russia and warned Venezuela not to send criminals to the US. The US stock market is showing mixed performance. The Dow is down by 0.18%, the S&P is flat, and the NASDAQ has risen by 0.5%. Oracle’s shares climbed by $13.21, or 4.42%, reaching $315.52 after strong earnings, despite earlier drops from $345.72 to $291.71. With questions about the Federal Reserve’s independence, the outlook for interest rates is uncertain. Last week, futures were pricing in an 85% chance of a rate cut by December 2025, but this has now fallen to a 50/50 chance. Traders may want to consider options on Treasury ETFs to guard against unexpected policy changes not based on economic data. The call for a deal between Russia and Ukraine, along with pressure on Europe to stop buying Russian oil, is causing energy market fluctuations. We saw similar price spikes in 2022, with WTI crude already up 4% this month to over $90 a barrel. Call options on oil and energy sector stocks could be beneficial in this unstable environment.

Tariffs and the Trade Deficit

The renewed focus on high tariffs for China and Europe suggests a potential slowdown for multinational companies. While the US trade deficit has decreased by 7% this year, this is largely due to rising consumer prices. Traders may want to consider put options on transportation and industrial sector ETFs that depend on global trade. The upcoming TikTok deal offers a specific opportunity with Oracle (ORCL). After rising to $345 and dropping below $300 last week, the stock’s implied volatility is very high. Traders might look into straddles or strangles on ORCL to profit from a large price movement once the buyer is officially announced. There is a noticeable divide in the market, with the Nasdaq up and the Dow down. The tech-heavy Nasdaq has risen over 18% this year, while the Dow remains nearly flat. This trend indicates that money is flowing into specific growth areas rather than the overall economy, suggesting options might be better for targeted investments in tech indexes over broader market index funds. Create your live VT Markets account and start trading now.

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