US economy news, as Donald Trump embarks on a potential second term, the implications for the U.S. economy are a topic of considerable debate.
In the three days following Donald Trump's inauguration, significant changes swept through the financial markets. His policy agenda began to take shape, leading to notable fluctuations in various sectors.
Tech stocks experienced a strong rally this week due to Trump's announcement of a $500 billion AI infrastructure initiative called "Stargate."
Stock Movements
Prominent AI companies, including Oracle and SoftBank, are set to participate, with initial technology partners like Nvidia and Microsoft involved as well. Trump stated that this initiative would create over 100,000 jobs across the U.S.
Tech stocks related to AI soared, with Oracle gaining 14% and ARM jumping 20%. Trump emphasized the importance of AI, declaring it a path to unprecedented prosperity for the nation.
Stocks associated with space travel and exploration have maintained their upward trajectory since Trump's election victory in November. His administration has long supported space initiatives, including the establishment of the Space Force.
Investor Sentiment
Trump's enthusiasm for space, coupled with his relationship with SpaceX founder Elon Musk, has led investors to bet on a bullish market for space stocks. Following his inauguration, companies like Intuitive Machines, Redwire, and Rocket Labs USA saw stock increases of 21%, 47%, and 23%, respectively.
In contrast, electric vehicle stocks have struggled since Trump's inauguration, with indications that he may terminate incentives promoting EV adoption.
Policy Changes
On his first day in office, Trump rescinded 78 executive orders from former President Biden, including mandates for 50% of cars made in the U.S. by 2030 to be electric. This has led to declines in stocks of smaller EV companies like Lucid and Rivian, which fell by 13% and 11%, respectively. Even Tesla, led by Musk, saw its stock drop approximately 3%.
Bitcoin emerged as a key asset benefiting from Trump's presidency, reaching a near all-time high of nearly $110,000 shortly after his inauguration.
Cryptocurrency Outlook
Despite no mention of cryptocurrencies during his inaugural address, the SEC announced a task force to clarify regulatory frameworks for the crypto industry. This has fueled optimism for the future of cryptocurrencies, reinforcing Bitcoin's upward momentum.
Since Trump's inauguration, currency markets have shown mixed performances. The dollar index slightly declined against a basket of currencies, although it strengthened against the Mexican peso and Canadian dollar.
Tariff Threats
The weakness in these currencies can be attributed to Trump's threat to impose a 25% tariff on Mexico and Canada. Goldman Sachs noted that this stance was more hawkish than expected. Meanwhile, the general threat of tariffs appears to have been set aside, leading to a weaker dollar against most other currencies, which in turn pushed gold prices to their highest levels since the U.S. elections.
In summary, the first three days of Trump's presidency have brought significant volatility across various markets. With tech stocks surging, space exploration gaining traction, and electric vehicle stocks facing challenges, the market landscape is evolving rapidly. The currency market is displaying diverging trends influenced by tariff threats, while Bitcoin continues to rise amid regulatory clarity. These changes signal a dynamic shift in the financial landscape under Trump’s administration.
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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
