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From Tweets to Trades: How the First Day of Trump's Presidency in 2025 Set the Tone for Q1 Stock Market Performance

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The year 2025 will mark the beginning of a new chapter for the United States and global markets. Donald Trump, after a period of political and financial inactivity, is poised to return to the helm with a presidency that, like his previous ones, promises to shake the economic foundations of the country and the world. As investors and analysts prepare for the first weeks of his presidency, many questions arise about the immediate and long-term impacts this event will have on stock markets and the global economy. When has a new administration ever been so closely watched and, at the same time, so unpredictable? Through this article we will attempt to delve into the possible future dynamics and repercussions that this election could bring in both the short and long term.

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Trump 2.0: Expectations and Impacts on Markets.

Donald Trump's return to the White House after winning his second presidency will not only be a historic moment politically, but also a critical one for global financial markets. What to expect from the first day of his presidency? First and foremost, expect a strong reaction in the international stock markets, with investors ready to bet on a Trump comeback, especially in the large technology and media companies, areas that had experienced a remarkable surge during his first term. His policy of deregulation and business-friendly approach could spur growth in the more volatile sectors, such as energy and commodities.

 

What could be the Economic Consequences?

Donald Trump has already announced that he will implement another round of corporate tax cuts, incentivizing the growth of domestic businesses and promoting domestic innovation. However, this could also generate concerns on the public debt front, creating a tension between economic growth and the risk of over-indebtedness.

 

Trump 2025 profits

In the short term, expectations are for a possible acceleration of growth in infrastructure-related sectors such as construction and real estate. Its policy agenda, already focused on economic stimulus and tax cuts, is likely to have a positive impact on these areas. Experts expect there to also be an uptick in benchmark indexes such as the Nasdaq and S&P 500, especially in the technology sector, but uncertainty related to his foreign policy measures, particularly regarding China, could generate fluctuations and increase risk. The market could be characterized by increased volatility, with peaks of optimism and moments of retracement. Another key factor will be the markets' reaction to Trump's initial moves on cryptocurrency and blockchain regulation, a topic that was frequently discussed during his campaign.


 

How is the global economy responding to this new policy shift?

Tax cuts and productivity gains from deregulation and technological innovation are allowing the economy to grow well above trend, while inflation falls below 2 percent, allowing the Fed to remain dovish, which would reinforce the generally positive trend in the global economy and the global central banks' bias toward easing. Given the importance of the U.S. to Europe and China, stable global growth of about 2.8 percent in 2025 is expected in the baseline scenario referring to Trump's policies.

 

What are the earnings forecasts for 2025?

Risks seem greater for Emerging Markets, but they continue to offer value in the main scenario. At the level of regions and markets, it is believed that resilience will be the defining characteristic of global equities in 2025, with companies likely to go on to see continued increases in earnings and returns for investors. But there is little room for further expansion in multiples. The outlook for earnings is satisfactory, although it is slightly lower than last year For 2025, global earnings per share are expected to increase by about 7 percent, up from an estimated 12 percent.

 

What scenario is in store for foreign policy?

In terms of foreign policy, we could see a conciliatory move to resolve the conflict in Ukraine in order to have greater cooperation with Russia. This could favor the European market, going to reduce the price of oil with an increase in growth and an inflationary decrease in the European zone. Conversely, while tensions with Russia might ease, those with China are likely to increase should President Trump resume the foreign policy of 2016. Indeed, President Trump has declared his intention to impose further tariffs on China if it were to “enter Taiwan”. As a result, all European countries that trade with China could be disadvantaged. In addition, some European companies could see increased tariff threats with the U.S., and the auto sector, where we have little exposure, could be the sector potentially most affected, given Trump's preference for gas and diesel vehicles over electric-powered vehicles. Luxury goods could also be adversely affected, and as mentioned above, a trade war with China could only make things even worse, as the great Eastern power could threaten what we can describe as a key European sector.


Final Thoughts.

In conclusion, Donald Trump's return to the presidency could lead to significant implications from an economic-financial perspective. Indeed, Trump 2.0 could have a significant influence on stock markets. By comparing with previous early quarters, it can be seen how administrative priorities may determine market trends. The performance of some indexes in some key sectors such as technology or energy, reflects the optimism and volatility of these priority economic areas.

 

For the rest of the year, we have seen that the trend may depend mainly on the implementation of policies announced by the new U.S. president and market reaction. In all this, a key role in defining the overall impact of the first year of the administration could be given by the evolution of legislation and also the potential investment decisions of companies. All that remains is to wait and see how global economic policy will evolve in the face of this new political upheaval, but not only.

 


 

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