With Trump Returning to the White House, How Will Markets Move?
Investors are bracing for Donald Trump’s second inauguration as the President of the United States, anticipating benefits from his business-friendly agenda, yet remaining cautious about his protectionist trade policies, particularly his stance on tariffs.
Trump returns to office with an ambitious agenda that includes trade reform, immigration crackdowns, tax cuts, and easing regulations on cryptocurrencies.
Investment managers are adjusting their portfolios across various asset classes, keenly watching his inaugural speech for clues that might lead to near-term market movements.
Sam Stovall, Chief Market Strategist at CFRA Research, stated, “Uncertainty is still the watchword, with everyone on the lookout for answers to questions like whether the tariff threats will become reality or remain a negotiating tactic on day one.”
However, many hold onto hopes for a relatively calm response to the President’s initial comments and actions.
Michael Aron, Senior Investment Officer at State Street Global Advisors, commented, “Trump’s rhetoric might be much harsher than what he will actually implement initially.” Aron expects the timing and impact of Trump’s more significant policy changes to unfold over a longer period.
Nevertheless,
Trump’s plans regarding tariffs could heighten inflation concerns, putting pressure on bond and stock prices, while efforts to tighten immigration controls might also affect the markets.
The promise of regulatory relief has led to boosts in bank stocks and significant spikes in cryptocurrency values.
With reports of increasing profits, Wall Street executives have told investors that the incoming U.S. administration will be business-friendly and beneficial for banks.
Stovall added,
“Investors are excited about the potential regulatory relief and possible income tax reductions for corporations and businesses.”
Post-election, the Standard & Poor’s 500 index saw a slower rise to a gain of 2.7 percent after early January sell-offs due to inflation worries.
Trump intends to start his presidency with a series of executive orders targeting key policy areas such as immigration and energy.
According to earlier reports by Reuters, the cryptocurrency sector expects Trump to fulfill his campaign promises by becoming the “President of Cryptocurrency” through actions like creating a federal Bitcoin stockpile, increasing banks’ access to cryptocurrencies, and establishing a Cryptocurrency Council.
This article reflects the current sentiment around Trump’s economic policies and their anticipated impact on financial markets based on recent statements and market reactions. However, the actual outcomes will depend on the execution of these policies and global economic conditions.
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