Donald Trump Returns: How Did US, Global Markets React To New US President's Announcements

Donald Trump officially returned as President of the United States on January 20, but the US markets remained closed in observance of Martin Luther King Jr. Day.

When trading resumed the following day, investors were quick to react to Trump’s initial policy signals, driving strong gains across Wall Street.

Donald Trump’s Return Sparks Market Movements

The Dow Jones Industrial Average surged over 500 points, or 1.2%, on Tuesday, while the S&P 500 rose 0.9% and the Nasdaq Composite climbed 0.6%.

The market rally came as Trump’s comments about trade policy and investment plans mostly assuaged traders who had anticipated more aggressive measures.

Wall Street Gains Amid Tariff Talks and AI Investment
In a press conference Tuesday evening, President Trump revealed his administration was considering a 10% tariff on Chinese imports, potentially starting February 1, citing concerns about fentanyl distribution. “We’re talking about a tariff of 10% on China based on the fact that they’re sending fentanyl to Mexico and Canada,” Trump said.

In addition, Trump announced a groundbreaking joint venture, “Stargate,” involving OpenAI, Oracle, and Softbank, aimed at investing “$500 billion, at least” in AI infrastructure within the United States. Oracle shares surged over 4% in extended trading on optimism surrounding the announcement.

Tech and Airline Stocks Lead the Rally
The technology sector saw notable gains, led by Netflix, whose shares soared more than 14% in after-hours trading after the streaming giant surpassed 300 million paid memberships. United Airlines also posted a strong performance, climbing over 3% following a robust fourth-quarter earnings report and a positive outlook for the year ahead.

However, not all tech companies benefited from the day’s momentum. Apple shares fell more than 3%, weighed down by two analyst downgrades.

Global Market Reactions and Currency Movements
Trump’s return and his trade policy considerations sent ripples across global markets. While US futures showed strength, European shares dipped in early trade. The Mexican peso and Canadian dollar weakened against the US dollar, reflecting concerns over potential 25% tariffs on imports from these countries, which Trump hinted at imposing by February 1.

On Tuesday, the Indian stock markets witnessed a downturn as both the Sensex and Nifty ended in the red. The Sensex closed at 75,985.86, down by 1087.58 points or 1.41%. Among the top gainers were HCL Tech, UltraTech Cement, and ITC, while major losers included SBI, M&M, Zomato, Kotak Bank, and Reliance Industries. Similarly, the Nifty finished at 23,052.75, marking a decline of 292.00 points or 1.25%. Gainers on the Nifty included Apollo Hospitals, Tata Consumers, Shriram Finance, BPCL, and JSW Steel, whereas losers encompassed Trent, NTPC, Adani Ports, ICICI Bank, and Adani Enterprises. Overall, the market sentiment turned bearish with all sectors closing lower amidst broader economic concerns.

Earnings Season Adds to Market Dynamics
As earnings season continues, major companies like Procter & Gamble, Johnson & Johnson are set to release quarterly results. These reports will add further context to how businesses are navigating the evolving economic landscape under Trump’s administration.

Markets on Alert for Policy Shifts
Trump’s return to office has reignited discussions around trade and economic strategy, leaving global markets on high alert. As investors digest his early policy moves and upcoming earnings reports, the stage is set for a dynamic start to his presidency.