Donald Trump has stated that the Federal Reserve should remain an independent body. He confirmed Miran’s appointment as an FOMC Governor. Trump mentioned that the use of hostages as human shields by Hamas would lead to severe consequences, implying support for Israeli actions in Gaza. He asserted that tariffs are bringing trillions of dollars to the US economy.
Trump is set to announce a TikTok deal, hinting at a buyer. He noted that the EU pays $950 billion yearly, Japan $650 billion, and that China contributes about 55% through tariffs. He suggested that a Supreme Court win could position the US as the richest nation, attributing this to trillions in tariff revenues.
Peace Talks and European Oil Purchases
Trump indicated the need for peace talks involving the Russian and Ukrainian presidents, emphasising a resolution by Zelenskyy. The US urged Europe to halt oil purchases from Russia and cautioned Venezuela against sending criminals to the US.
US stock market performance is varied, with the Dow down 0.18%, the S&P unchanged, and the NASDAQ rising by 0.5%. Oracle’s shares have increased by $13.21 or 4.42%, reaching $315.52, following strong earnings and recent price fluctuations. Its price had dropped from $345.72 to $291.71 before beginning to recover.
With the Federal Reserve’s independence now in question, we see a new level of uncertainty for interest rates. Fed funds futures, which last week were pricing in an 85% chance of a rate cut by December 2025, have already dropped to a 50/50 probability. This suggests traders should look at options on Treasury ETFs to hedge against sudden policy shifts not driven by economic data.
The push for a deal between Russia and Ukraine, combined with pressure on Europe to stop buying Russian oil, creates volatility in energy markets. We saw a similar situation when prices spiked back in 2022, and WTI crude is already up 4% this month to over $90 a barrel. Call options on oil and energy sector stocks could be a way to trade this expected instability.
Tariffs and the Trade Deficit
Renewed talk of high tariffs on China and Europe signals a potential slowdown for multinational companies. The U.S. trade deficit has narrowed by 7% this year, but this has been linked to higher consumer prices. This environment suggests traders could look at put options on transportation and industrial sector ETFs that rely on global trade.
The upcoming TikTok deal is creating a specific, event-driven opportunity in Oracle (ORCL). After surging to $345 and then falling below $300 just last week, the stock’s implied volatility is extremely high. Traders might consider using straddles or strangles on ORCL to profit from a large price move in either direction once the buyer is officially announced.
We are seeing a clear split in the market, with the Nasdaq up while the Dow is down. This divergence, with the tech-heavy Nasdaq up over 18% year-to-date while the Dow is nearly flat, shows money flowing into specific growth stories rather than the broader economy. This trend supports using options for targeted bets on tech indexes over broad market index funds.
