Interest rate cut expectations and core dynamics of market reactions

• White House economic advisors say that the Federal Reserve's three interest rate cuts are just the beginning, reinforcing market expectations for easing.

• Gold prices briefly broke through $4300 to hit an all-time high but quickly fell back below $4200, with a daily decline exceeding 3%.

• Historical data shows that in non-recession periods, the average return of the S&P 500 index 12 months after an interest rate cut is 14.2%.

Gold Technical Analysis

• Short-term risks: Daily RSI indicator exceeds 80, entering a severely overbought zone, indicating a need for a pullback.

• Key price levels: Support below at $4170-$4150, resistance above at $4220-$4240.

• Long-term trend: The interest rate cut cycle provides an upward logic for gold prices, and pullback layouts can be considered.

U.S. Stock Investment Strategy

• Market outlook: The interest rate cut cycle is favorable for the stock market, with market focus shifting to corporate earnings.

• Sector focus: Attention can be paid to large growth stocks and small-cap stocks sensitive to interest rates.

• Risk management: Given the high valuation of U.S. stocks, a “barbell” strategy (AI stocks + gold) can be adopted to balance risks.