Tuesday, January 7, 2025 ▪
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A few words are enough to shake up markets, and Donald Trump has proven that once again. A Washington Post article suggested that his team is seeking a more nuanced approach to tariff policy. This single hypothesis was enough to send stock indexes higher, with investors betting on an easing of trade tensions. But the former president was quick to react. In a message posted on social media, he flatly denied the information and claimed it was yet another attempt at media manipulation. This sudden turnaround shocked the entire financial market.
Wall Street gains momentum, the dollar drifts
Markets reacted with unusual force to a Washington Post report that hypothesized that US tariff policy would change under the Trump administration. According to the paper, those around the former president were considering imposing a flat tax on imported goods, but instead targeting only specific strategic areas. This view immediately sparked optimism among investors, who interpreted the change in direction as a positive signal for global trade and economic growth.
Stock purchases doubled amid a wave of euphoria, pushing U.S. stock indexes to new heights. The S&P 500 rose 0.55% to 5,975.38 points and the Nasdaq rose 1.24% to close at 19,864.98 points. Tech stocks and communications services, sensitive to the prospect of a more stable trading environment, therefore particularly benefited from this enthusiasm. Across the Atlantic, European stock indexes followed suit, with the STOXX 600 up 0.94% and near its all-time high.
However, this stock market rally immediately had the side effect of a significant depreciation of the US dollar. The dollar index fell 0.68% to 108.22 points, while the euro rose 0.8% to trade at $1.039. This decline in the dollar reflects market uncertainty about the economic trajectory that President Trump will actually follow once he returns to the White House. Expectations for tariff barrier relief have heightened concerns about a widening trade deficit, increasing pressure on the U.S. currency. With just weeks until Inauguration Day, the fluctuations reflect investor nervousness amid the cacophony between Trump’s comments and leaks from political aides.
Commodity tensions and fixed income uncertainty
The stock market turnaround proved short-lived. Immediately after the Washington Post article was published, Donald Trump took to social media to firmly refute his intention to ease tariff policy. He labeled the paper’s report “fake news” and said, “This is yet another attempt by the media to cause confusion.” He insisted he wanted to maintain a hard line on international trade and rejected any idea of easing tariffs.
This sudden reversal quickly revived investor nerves. In the bond market, US Treasury yields rose, reflecting a reassessment of future economic risks. The 10-year bond yield rose to 4.612%, and the 30-year bond yield rose to 4.8337%. This increase reflects increased market uncertainty regarding the Federal Reserve’s future decisions and future trade tensions.
This influence also extended to products. Oil prices fell due to economic uncertainty, with Brent crude at $76.30 (-0.3%) and WTI at $73.56 (-0.5%). The decline reflects investors’ concerns about the rigidity of announced US tariff policies, which could dampen global demand. As a result, gold, which is often seen as a safe-haven asset, also recorded a slight decline, weighed down by rising bond yields that make the dollar more attractive.
Uncertainty remains in the air, with markets caught between conflicting statements and still-ambiguous economic policy. Investors are therefore struggling to discern Donald Trump’s true strategy as tensions over interest rates and inflation continue to fuel anxiety. Each statement by the president-elect is now acting as a catalyst for volatility, forcing lenders to adjust their expectations in real time. As his inauguration approaches, market volatility is likely to intensify, raising concerns that economic and financial uncertainty will linger into 2025.
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Toulouse Scientific Diploma and Certification Consultant Alila Blockchain Exam Rejoined in 2019 Coin Tribune. Consider the potential of blockchain in the field of economics and learn economics with great sensitivity and engagement with informants in public safety and environmental systems and evolution. The month is about understanding blockchain and its opportunities. Analyze the purpose of reality, decipher the trend of Marche, analyze the innovative technology and perspective, and analyze the social revolution of Marche.
Disclaimer
The views, ideas and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Please do your own research before making any investment decisions.
