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Following Donald Trump’s inauguration, US stocks saw a slight rise while currencies experienced fluctuations. Investors were analyzing the new president’s tariff threats and initial actions on his first day in office.
The S&P 500 ended the day up 0.9%, with the Nasdaq Composite also gaining 0.6%. Both markets had been closed the previous day for a public holiday.
During a late Oval Office address, Trump mentioned the possibility of imposing 25% tariffs on Mexico and Canada by February 1. He also signed multiple executive orders focusing on various issues, aligning with his campaign promises.
His tariff warnings caused the Mexican peso to drop by 0.7% against the dollar and the Canadian dollar to decrease by 0.1%.
Market analyst Derek Halpenny noted, “Considerable tariff actions are likely in the future, but the exact details and timing are still uncertain.”
Trump’s emphasis on using trade restrictions as a diplomatic strategy was evident as he also targeted the EU, threatening tariffs if the bloc did not increase its purchases of US oil.
The dollar saw a 1.3% decline against a basket of currencies due to the absence of immediate tariffs on the first day of Trump’s presidency.
Investors are bracing for potential disruptions this week, particularly in currency markets, as Trump unveils plans to reverse many of Biden’s policies and adopt a protectionist agenda.
Economist Eric Winograd commented, “This level of volatility is becoming the norm. Trump’s administration is expected to be less predictable and process-driven compared to Biden’s.”
In other market news, the FTSE 100 and Germany’s Dax both saw gains, while the Europe Stoxx 600 also rose.
Wind energy companies faced losses after the Trump administration announced a halt on new wind projects. Ørsted, the largest offshore wind developer, saw a significant drop in its stock. Bitcoin also experienced price fluctuations, reaching a new high before retracing some gains.
Content compiled by Adam Samson, Harriet Clarfelt, Aime Williams, Arjun Neil Alim, Leo Lewis, Nic Fildes, Mari Novik, and Ian Smith