Trump’s First-Day Decisions: A New era for Technology, Energy, and Trade
The United States technology sector is poised for sustained growth following President Donald Trump’s swift actions on his first day in office. according to a study by Osama Al-Ashry, a financial markets expert and member of the Technical Analysis Society – Britain, Trump’s decision to cancel former President Biden’s executive order addressing the risks of artificial intelligence has created a favorable surroundings for the sector. This move is expected to allow the American technology industry to continue its trajectory of enduring earnings growth.
Along with impacting the tech sector, Trump’s cancellation of the mandate requiring 50% of all new vehicles sold to be electric by 2030, coupled with the freezing of unspent energy charging infrastructure funds, has shifted the focus toward conventional energy companies. While this decision may hinder the electric vehicle and clean energy industries, it has positively influenced the performance of US stock market indices. The US dollar and government bond returns have also rebounded following Trump’s statements on customs tariffs,while the Canadian and Mexican currencies saw reduced gains. Oil prices, simultaneously occurring, declined after Trump signed several decisions aimed at boosting domestic energy production.
Global Trade and market Reactions
Trump’s temporary suspension of customs tariffs on China and his administration’s focus on addressing unfair global trade practices have already had a ripple effect on international markets. Financial market indicators in Hong Kong rose, signaling optimism about potential negotiations for a new trade agreement between the US and China. Al-ashry’s study highlights that Trump’s early announcements reflect an attempt to balance frequently enough conflicting political and economic priorities.
One of the key strategies in Trump’s economic plan is the use of customs tariffs as a negotiating tool.While his initial speech lacked specific details, subsequent comments revealed plans to impose 25% tariffs on Mexico and Canada starting February 1, 2025. Thes measures, along with a review of previous trade agreements, aim to reduce the US trade deficit and attract investments in manufacturing and job creation. This approach has alleviated fears of a full-blown trade war, though markets and investors remain eager for more detailed policies on tax cuts, deregulation, and tariffs.
Energy Policy and Inflation Control
Trump’s energy policy, which emphasizes liberalizing and enhancing domestic production, has already led to a decrease in oil prices. This move is part of a broader strategy to address inflationary pressures on the American economy. The study notes that oil prices fell after Trump announced his energy policy plan, reversing a previous increase driven by strict US sanctions against Russian oil entities.
Bond Markets and Currency Fluctuations
The bond markets have also felt the impact of Trump’s executive orders. While the first wave of decisions largely ignored the direct effects of tariffs, bond yields declined as inflation concerns eased. However, the potential for future tariff adjustments has kept returns volatile. Long-term bond yields had risen before Trump’s inauguration in anticipation of inflationary policies, but weaker-than-expected consumer price index data for December led to a rebound in the 10-year bond yield.
The US Dollar Index (DXY) recovered from early losses after Trump’s announcement of potential tariffs on Canada and Mexico, causing the Canadian and Mexican currencies to decline by over 1% against the dollar before partially recovering.
Key Takeaways
| Policy Area | Impact |
|————————–|—————————————————————————|
| Technology | cancellation of AI risk regulations supports sustainable earnings growth. |
| Energy | Shift toward traditional energy companies; electric vehicle industry affected. |
| Trade | Tariffs used as negotiating tools; potential for new US-China agreement. |
| Bond Markets | Volatility persists; bond yields fluctuate with tariff expectations.|
| Currency | US dollar strengthens; Canadian and Mexican currencies decline. |
Trump’s first-day decisions have set the stage for significant shifts across multiple sectors. As markets and investors await further details, the early actions signal a strategic approach to balancing economic growth, trade, and inflation control. For more insights on how these policies may evolve, stay tuned to updates from financial experts and market analysts.
