US Markets Rally on First Day Under Trump – Dow Up 1.2%
US stocks rallied on their first day of trading under the new government as investors digested a plethora of executive orders and updates. The Dow led the way, finishing the session up 1.24%, followed by the S&P and Nasdaq, which closed up 0.88% and 0.64% respectively. The dollar finished the day close to flat but experienced some sharp moves, particularly against the CAD and MXN, after Trump advised that tariffs would proceed but did not provide much detail. Treasury yields drifted lower, with the 2-year yield down 0.9 basis points to 4.274% and the 10-year off by 5.1 basis points to 4.576%. Oil prices took another hit after Trump declared a national energy emergency, with Brent down 0.95% to $79.35 and WTI down 1.90% to $75.92. Meanwhile, haven buyers piled into gold, pushing it to levels not seen since early November prior to the US election, with the precious metal jumping 1.25% to $2,742.47.
Gold in Favour Again in Uncertain Times
Gold prices surged to new multi-month highs overnight as investors continued to process fresh updates from Donald Trump and his new administration. The uncertainty surrounding certain policies, particularly tariffs, drove haven flows into the precious metal. Traders are expecting more volatility in the coming days, with confirmation of plans likely leading to dollar buying and gold selling, while continued uncertainty could challenge all-time highs. The market broke through key trendline resistance last night, technically opening the way to reach the $2,790.15 level. However, most traders believe another catalyst will be needed to make this jump. What seems more certain in the current environment is the likelihood of choppy trading ahead.
Quiet Calendar Day to Allow Investors to Analyse US Updates
The macroeconomic event calendar is relatively quiet today, providing investors with an opportunity to digest the substantial updates and information released by the new US government and President over the past few days. New Zealand’s Quarterly CPI data has already printed in line with expectations, but no significant events are scheduled for the rest of the Asian session. Similarly, the European and New York sessions are devoid of major data releases. ECB President Christine Lagarde is set to speak at the WEF Annual Meetings in Davos, but most traders expect sentiment to remain dominated by developments from the US.
