US Stocks Rise on Trump's Trade Policies and AI Initiatives

US stocks experienced a significant boost during the first trading session of Donald Trump's presidency due to investor optimism surrounding his trade policies and support for artificial intelligence (AI).

The Dow Jones Industrial Average surged by over 500 points, driven by Trump's softer-than-expected tariff announcements. The S&P 500 and Nasdaq Composite also reported gains, with small-cap stocks showing notable performance as the Russell 2000 index increased by nearly 2%.

Bond yields fell as the 10-year US Treasury yield decreased by four basis points, settling at 4.564%. Investors welcomed these developments, offering relief from earlier trade tensions.

Although Trump made tariffs a central part of his trade policy, the lack of immediate execution helped calm anxious market participants. The president proposed a potential 25% tariff on goods from Canada and Mexico, effective February 1st, but delayed broader trade announcements.

In a strategic move, Trump has directed certain departments to analyze the ramifications of trade and currency practices by April, paving the way for possible adjustments to the tariff policy after that date.

Additionally, Trump is anticipated to reveal plans for a joint investment venture involving major tech companies like Oracle, OpenAI, and Softbank. This initiative is set to invest billions into US AI infrastructure, contributing to a lifted sentiment in the technology sector, with stocks like Nvidia, Amazon, and Alphabet seeing inflation.

The positive outlook in the stock market was further fueled by expectations of a pro-business agenda under the Trump administration. On his first day, the president declared a national energy emergency aimed at enhancing fossil fuel production in the US, alongside implementing a temporary regulatory freeze.

Market Performance Summary

At the market close on Tuesday, the US indexes demonstrated the following performance:

• S&P 500: 6,049.24, up 0.88%
• Dow Jones Industrial Average: 44,025.81, up 1.24% (+537.98 points)
• Nasdaq Composite: 19,756.78, up 0.64%

Additional Market Insights

In other news, the SEC began a crypto task force during Trump's second day in office, aligning with the president's wealth in cryptocurrency. Speculations have also arisen concerning Trump's engagement with meme coins, while a leading investor has cautioned about a potential stock market bubble.

In the commodities, bonds, and cryptocurrency sectors:

• West Texas Intermediate crude oil fell by 2.30%, currently priced at $76.09 per barrel, while Brent crude dropped by 0.84% to $79.47.
• Gold increased slightly, reaching $2,754 an ounce.
• The 10-year Treasury yield decreased to 4.564%.
• Bitcoin prices rose by 2.51%, now valued at $106,570.

Stocks, Trade, Investment