20h17 ▪
5
min read ▪ by
A few statements are enough to shake the markets, and Donald Trump has demonstrated this once again. An article from the Washington Post suggested that his team was exploring a more nuanced approach to tariff policy. This single hypothesis was enough to propel stock indices upwards, with investors betting on a relaxation of trade tensions. However, the former president was quick to respond. In a message posted on social media, he firmly denied this information, calling it yet another attempt at media manipulation. This abrupt turnaround triggered a shockwave across financial markets.
Wall Street propelled, the dollar adrift
The markets reacted with unusual vigor to the Washington Post’s publication, which put forward the hypothesis of a shift in U.S. tariff policy under the Trump administration. According to the newspaper, the former president’s circle had considered targeting only specific strategic sectors instead of imposing a blanket tax on imports. This perspective immediately fueled investor optimism, who interpreted this change in direction as a favorable signal for global trade and economic growth.
In a wave of euphoria, stock purchases multiplied, propelling U.S. stock indices to new heights. The S&P 500 rose by 0.55 % to reach 5,975.38 points, while the Nasdaq jumped by 1.24 %, closing at 19,864.98 points. Thus, tech stocks and communication services, sensitive to the prospect of a more stable trading environment, particularly benefited from this enthusiasm. Across the Atlantic, European indices followed suit, with the STOXX 600 showing a 0.94 % increase, nearing its highest levels of the session.
However, this stock market surge had an immediate side effect: a marked weakening of the U.S. dollar. The dollar index fell by 0.68 %, reaching 108.22 points, while the euro strengthened by 0.8 % to trade at 1.039 dollar. This decline of the dollar reflects market uncertainties regarding the economic trajectory Trump might actually follow upon returning to the White House. The anticipation of a relaxation of tariff barriers has fueled fears of an increased trade deficit, which has heightened pressure on the U.S. currency. With just weeks to the presidential inauguration, this volatility reflects investor nervousness amidst the dissonance between Trump’s statements and leaks from his political entourage.
Commodity tensions and bond uncertainties
The stock market upturn proved to be short-lived. Shortly after the publication of the Washington Post article, Donald Trump took to social media to categorically refute any intention to soften his tariff policy. “This is another attempt by the media to sow confusion,” he stated, labeling the newspaper’s report as “Fake News”. He insisted on his desire to maintain a tough line on international trade, thus dismissing any notion of relaxing tariff rates.
This abrupt reversal immediately revived investor nervousness. In the bond market, yields on U.S. Treasuries surged, reflecting a reassessment of economic risks ahead. The yield on 10-year bonds rose to 4.612 %, while that of 30-year bonds reached 4.8337 %. This increase reflects growing market uncertainty regarding future decisions from the Federal Reserve and upcoming trade tensions.
The impact was also felt on commodities. In response to economic uncertainties, oil prices retreated, with Brent at $76.30 (-0.3 %) and WTI at $73.56 (-0.5 %). This decline reflects investor concerns about the announced rigidity of U.S. tariff policy, which could dampen global demand. Thus, gold, often seen as a safe haven, also recorded a slight drop, weighed down by rising bond yields that enhance the dollar’s attractiveness.
Uncertainty still looms over the markets, caught between conflicting statements and a still vague economic policy. Thus, investors struggle to discern Donald Trump’s true strategy, while tensions surrounding interest rates and inflation continue to fuel fears. Each statement from the president-elect now acts as a catalyst for volatility, forcing financial operators to adjust their expectations in real time. As his inauguration approaches, market fluctuations are likely to intensify, raising the specter of a 2025 marked by enduring economic and monetary uncertainties.
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Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
