Markets react to President Trump - 23.01.2025

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Markets react to President Trump - 23.01.2025

Following President Trump’s inauguration, financial markets have exhibited increased volatility influenced by his actions and policy announcements.

• On Monday the FTSE 100 reached a record high and continued into Tuesday with a modest gain. This performance mirrored the cautious optimism observed in other European markets as investors assessed the implications of the new administration’s trade policies. However, by Wednesday 22nd the index retreated from its peak, closing flat as declines in the mining sector offset earlier gains.

• The US dollar strengthen against the Canadian dollar and Mexican peso following Trump’s statements about imposing 25% tariffs on imports from Canada and Mexico. Despite these announcements US stock markets showed modest gains, indicating a complex market response to trade policy signals.

• Major US indices experienced gains, increases were partly driven by strong corporate earnings and optimism surrounding technological investments, notably a $500 billion AI infrastructure initiative.

• Oil prices experienced a decline, while gold reached a two-month high amid uncertainties surrounding tariff implementation and potential impacts on global trade.

• Bitcoin experienced slight volatility, pulling back from record highs reached on Monday 20th ahead of Trump’s inauguration.

Investors and analysts will watch closely to stay informed and exercise caution as the administration’s policies continue to unfold.

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