Market Optimism Soars as Trump’s Soft Approach to Tariffs Eases Fears
A New Era of Pro-Business and Deregulation
Stocks surged and bond yields plummeted on Tuesday as investors breathed a collective sigh of relief following Donald Trump’s first-day policy actions. The president’s softer approach to tariffs and promotion of a pro-business agenda dispelled market fears of abrupt implementation of tariffs disrupting the bull rally.
A Shift in Trade Policy
Trump’s executive order on trade stopped short of levying new duties on imports, instead directing the federal government to examine the impact of unfair business and currency practices. This move was seen as a less drastic day-one move on foreign trade, which Trump campaigned heavily on leading up to the election.
A Softer Tone on China
Goldman Sachs noted that Trump’s comments on China were less hawkish than during the presidential campaign, suggesting a lower priority on universal tariffs. This shift in tone has eased market concerns, leading to a decline in bond yields and the dollar.
Deregulation and Energy Production
The president’s declaration of a national energy emergency to promote US fossil fuel production and establishment of a regulatory freeze signaled a pro-business and deregulatory agenda. This move has boosted investor confidence, suggesting that the Trump trade is still alive and well.
Market Performance
US indexes saw significant gains on Tuesday, with the S&P 500 rising 0.51% to 6,027.22, the Dow Jones Industrial Average increasing 0.59% to 43,743.41, and the Nasdaq composite edging up 0.05% to 19,638.44.
Other Market Developments
- Crypto leaders are concerned that Trump’s meme coin is undermining their credibility.
- The biggest holders of Trump’s meme coin are seeing huge returns.
- An under-the-radar move in stocks is flashing a bullish signal for 2025.
- Americans are struggling with credit card debt.
- Ratcheting up sanctions on Russian oil may be key to Trump’s plans to end the war in Ukraine.
Commodities and Bonds
- West Texas Intermediate crude oil fell 2% to $76.40 a barrel.
- Brent crude dropped 1.3% to $79.13 a barrel.
- Gold edged higher to $2,753 an ounce.
- The 10-year Treasury yield dropped three basis points to 4.576%.
- Bitcoin was down 4% to trade around $102,933.
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