According to The Kobeissi Letter, while the S&P 500 surged by 5% in two days due to 'tariff de-escalation' headlines, the U.S. Dollar Index ($DXY) showed a modest increase of just 0.2% today. This stability in the Dollar Index suggests that the currency market is not reacting as strongly to the trade optimism as the equities market. Traders should consider the potential implications of the U.S. Dollar's resilience amid positive market sentiment.

According to The Kobeissi Letter, US government spending has surged to 33.9% of GDP, marking a record high outside of crisis periods. This is slightly below the peak of 42.0% seen in 2020 during the pandemic. The comparison to the 2008 Financial Crisis highlights the significant fiscal expansion, which could have implications for inflation and interest rates, affecting trading strategies in the bond and currency markets.