Financial markets showed positive momentum early Tuesday as investors processed multiple policy declarations from newly inaugurated President Donald Trump, who assumed office as the 47th U.S. President on Monday.
In his first executive actions, Trump declared a national emergency aimed at expediting oil and gas drilling operations while
simultaneously nullifying a previous Biden administration order that had restricted U.S. exports. Although immediate tariffs were not implemented, Trump indicated potential levies on Canadian and Mexican imports could begin as early as February 1st.
The presidential announcements created market volatility overnight, with currency markets particularly affected. The U.S. dollar index declined 0.6% to 108.679 against major currencies, while Canada’s dollar reached a five-year low of 1.4515 following Trump’s suggestion of 25% import tariffs.
In the Treasury market, 10-year yields dropped 4 basis points from Friday’s levels to 4.571%, with 2-year notes settling at 4.259%. Energy markets saw declining prices, with Brent crude falling 94 cents to $79.23 per barrel and WTI crude decreasing 80 cents to $75.75 per barrel.
Market indicators pointed toward a strong opening, with S&P 500 futures suggesting a 24-point gain, while Dow Jones Industrial Average futures indicated a 152-point advance. The tech-heavy Nasdaq was positioned for a 105-point increase, with notable pre-market activity in Intel, Nvidia, and Tesla shares.
In corporate news, 3M reported better-than-expected fourth quarter results, with earnings of $1.68 per share exceeding analyst estimates by 2 cents. Revenue increased 4% to $6.01 billion. The company’s 2025 profit guidance of $7.60 to $7.90 per share aligned with market expectations, though revenue projections fell slightly short of consensus estimates. 3M shares rose 1.25% in pre-market trading to $142.79.
European markets showed mixed reactions, with the Stoxx 600 gaining 0.22%, though automotive stocks declined following Trump’s reversal of Biden’s electric vehicle mandate that had targeted 50% electric car sales by 2030. London’s FTSE 100 posted a modest 0.07% increase.
Asian markets maintained stability, with Japan’s Nikkei 225 closing up 0.32%. Chinese stocks made slight gains, helping the MSCI ex-Japan index advance 0.03%, partly due to Trump’s measured approach toward China in his inaugural address.
Investment strategist Lindsay James from Quilter Investors noted Trump’s suggestion of a potential TikTok ownership deal and his pressure on European nations to increase oil and gas purchases to avoid tariffs. James emphasized that Trump’s presidency appears poised to significantly impact global economic dynamics.
Trump’s focus on inflation, though he incorrectly characterized current rates as “record highs,” prompted a directive to his cabinet to address price increases. His immediate policy actions signal a sharp departure from previous administrative approaches, particularly in areas of trade, energy, and international relations.
The combination of these policy shifts and market reactions suggests a period of potential adjustment as global markets adapt to the new administration’s economic agenda. With multiple policy changes announced and more expected, market participants remain alert to further developments that could influence trading patterns and international economic relationships.