Markets Rally After Trump Tariff Update – Nasdaq Adds 0.45%
US stock markets rallied on Tuesday as the market reacted to President-elect Donald Trump’s updated tariff pledges and the latest Federal Reserve meeting minutes. The Dow finished 0.19% higher, while the Nasdaq and S&P both added 0.45% on the day. The dollar continued to strengthen, particularly against the CAD, MXN, and CNH, with the DXY closing up 0.1% at 106.89. Treasury yields also rose following the Fed meeting minutes, which highlighted a split within the FOMC regarding the pace and extent of rate cuts. The two-year yield edged up by 0.6 basis points to 4.258%, while the ten-year yield climbed 4.6 basis points to 4.306%. Oil and gold prices remained relatively subdued, with haven factors balancing each other out as the Middle East ceasefire contends with increasing tensions in the Ukraine-Russia conflict. Brent crude fell 0.27% to $72.81, WTI dropped 0.25% to $68.77, and gold edged up 0.18% to $2,629.86.
Tariff Trades to Dominate FX Going Forward
FX traders received a glimpse of what lies ahead yesterday, as President-elect Donald Trump reiterated his plans to implement tariffs once he assumes office in early 2025. The dollar has strengthened significantly over recent weeks, particularly against the currencies of nations Trump has pledged to target, with China, Mexico, and Canada at the forefront. However, this trend had momentarily eased following the announcement that market-friendly Scott Bessent will serve as Treasury Secretary.
Trump’s strong update yesterday reignited market movement, with the dollar surging over 2.5% against the MXN, 1.5% against the CAD (hitting a four-year high), and the CNH reaching levels last seen in late July. For many traders, the session evoked memories of his previous term, when Trump’s tweets often wielded more influence than macroeconomic fundamentals. Many now anticipate a similar dynamic to unfold in 2025.
Action-Packed Trading Calendar Today
An eventful macroeconomic calendar and ongoing geopolitical developments are set to keep traders alert today. It is a busy session for antipodean markets, with key Australian CPI figures due ahead of the Reserve Bank of New Zealand’s latest interest rate decision. Markets remain divided over whether the RBNZ will announce a 50 or 75 basis point cut.
The London session has no notable economic releases, but the New York session promises to be active, as several US economic indicators are set to be published before the Thanksgiving holiday. Prelim GDP, weekly unemployment claims, durable goods orders, the Chicago PMI, and core PCE data are all scheduled. The core PCE figure is likely to have the most significant impact, especially if it deviates substantially from the forecasted 0.3% month-on-month increase.
