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Just another day in the frenetic underbelly of high finance as U.S. stocks nudged upwards and currency markets turned into a seesaw after Donald Trump took the presidential oath. Now, while you might expect fireworks on Trump’s first day, his silence on immediate tariffs had everyone still guessing. In typical Trump fashion, spoken in a New York dialect, there was plenty of heated rhetoric with a side of ambiguity.
Tariffs, tariffs, and you guessed it, more tariffs. This was Trump’s opening gambit from the comfort of the Oval Office. He broached a hefty 25% tariff against near neighbors Mexico and Canada. Why, you ask? Oh, to demonstrate a strict stance on weak border security and fentanyl trade issues or so the line goes. Read more about US-Mexico trade relations.
Interestingly enough, despite the president’s threats, we saw the S&P 500 tick up by 0.6% in mid-day trading. At the same time, tech-savvy Nasdaq Composite rose by 0.5%. A New York holiday had kept markets snoozing on Monday.
Currency Changes: A Mixed Bag
The talking wouldn’t be all about trade partners from down south; Trump laid his sights on Europe too. He riffed about slapping tariffs on the EU unless they shopped American-made oil. "They don’t take our cars," Trump quipped, as if they’re boycotting Mom’s home cooking. U.S. Trade Representative offers insights on EU trade. His dissonant trade talk dinged the Mexican peso and Canadian dollar, which inched down by 0.6% and 0.2%, respectively, after a steeper fall earlier on. Meanwhile, the euro made a sneaky comeback, ending up 0.1% higher at a cool $1.046; sterling shared its recovery flair by looping back to $1.233 flat. The U.S. dollar? Humbled at a 1.3% dip against currency cronies.
Stock Markets: A Law of Averages
Elsewhere across stock heaven, the FTSE 100 closed up 0.3% and Germany’s Dax remained buoyed with another 0.3% rise. Our Eurozone protagonist, the Stoxx 600, showed a petite yet proud 0.4% uptick. An ensemble of cautious optimism, some might infer. Yet Trump’s plan to rewind Joe Biden’s key policies and crank up America’s protectionism honed a tense atmosphere. After all, what can be more New Yorker than a fine mix of apprehension and audacity? Market behaviors post-inauguration explained.
Wind energy? Considered collateral damage on inauguration day. Ouch! The announcement to freeze new wind ventures rocked companies like Ørsted, watching their stocks take a nosedive by 10.7%. Vestas and Nordex shared the sinking sentiment, with drops of 2.3% and 1.8%. Talk about a breezy fall.
Cryptocurrencies and Bitcoin Blues
Even Bitcoin, the digital nomad, felt the jitters. Peaking at $109,241 on that famous day, things cooled down when the coin closed at $105,718, up just a smidge by 3%. Trump sidestepped any crypto chatter in his spiel, leaving that subplot in suspense. Thus ended a day that was equal parts tension, analysis, and speculation.
In the end, what’s noteworthy is this: Trump’s presidency hints at a more unpredictable rhythm. As Eric Winograd at AllianceBernstein put it, "This sort of volatility is the new normal." And if you need a guide through this political and financial maze? Remember, New Yorkers know it best. Sort of like unlocking that insider’s pass to the city that never sleeps.
