New Telegraph

Markets Optimistic As Trump Returns To The White House

Investors welcomed Donald Trump’s second inauguration, anticipating a pro-business agenda, while remaining wary of his protectionist trade policies, particularly his stance on tariffs.

During Trump’s speech, stock futures traded higher, with contracts on the Standard & Poor’s 500 index, the Nasdaq 100 index and the Dow Jones Industrial Average trading up between 0.4 per cent and 0.5 per cent.

The dollar weakened ahead of the inauguration, as the Trump administration signaled that new tariffs would not be imposed on the new president’s first day in office.

“Although we suspect that a fair degree of volatility will persist for a while yet, we ultimately expect his first year in office to coincide with a further rally in the US dollar and US equities,” said James Reilly, senior markets economist at Capital Economics.

Trump enters office with an ambitious agenda spanning trade reform, immigration crackdowns, tax cuts and loosening cryptocurrency regulation.

Investment managers are adjusting portfolios across asset classes, watching his inaugural address for signals that could trigger near-term market moves.

“Uncertainty remains the watchword, with everyone alert for answers to questions like whether the threat of tariffs will become a reality or remain a negotiating ploy on day one,” said Sam Stovall, chief market strategist at CFRA Research, said ahead of the inauguration.

But many hold out hope for a relatively muted response to the new president’s initial comments and actions. “The Trump bark might be worse than the Trump bite in the early going,” said Michael Arone, chief investment officer at State Street Global Advisors.

He expects the timing and impact of Trump’s most significant policy changes to play out over a longer time period.

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