Trump’s First Day Back: Wall Street Reacts

A typical New Yorker would probably say, "It’s Trump. Expect the unexpected." Our guy, now President Donald Trump — sworn back in on January 20, 2025 — is already causing ripples, alright? But the way Wall Street’s handling it? That’s a swirl worth talking about.

The Initial Reaction: Wall Street Finds Its Footing

So what happened? On Tuesday, the Dow Jones strutted its stuff, reflecting a cool confidence after Trump’s latest trade chatter. The Dow kicked up by a sweet 449 points — about 1% up. The S&P 500 followed the vibe, gaining 0.8%, and the Nasdaq Composite tagged along with a 0.6% rise. Everyone’s talking, am I right?

Here’s the lowdown: several big players saw upbeat movements. 3M was up by more than 4% — their earnings outperformed what the so-called experts expected. There’s something romantic in small-cap stocks joining the rally party, with the Russell 2000 inching up north of 1.5%.

The Tech Tango: Winners and Losers

Tech stocks tapped into the groove but it wasn’t all roses. Imagine this—Amazon and Google’s parent, Alphabet, each gaining over 2%. But here’s the kicker: Apple wasn’t invited to the celebration. Their stock dropped over 4% after facing two Wall Street downgrades. Ouch, talk about a bumpy ride.

Trump’s Trade Talk: The Softening Blow

Cue to President Trump’s first-day antics in the Oval Office — talk about tariffs, more promises, and some eyebrow-raising executive orders. His bold chatter about 25% tariffs on Mexico and Canada? All because of their border policies. And if you thought China was out of the woods, think again, as Trump dangled the tariff sword relating to some TikTok deal approval. Quite a circus, right?

Yet, just as folks were bracing for a heavy storm, Trump pulled back. His broad memorandum seemed more like a study hall for federal agencies, urging them to sniff out unfair trade deals. Not quite the firecracker start expected.

A Delicate Dance on Tariffs

Goldman Sachs’ ace economist, Alec Phillips, explained to clients that Trump’s initial trade talk was more talk, less walk. Granted, his stance on Mexico and Canada seemed fiercer than a Broadway show, yet Phillips lowered the odds of a universal tariff — much to investors’ relief.

"President Trump’s Inauguration Day policy announcements on tariffs were more benign than expected." — Alec Phillips

And tariffs on China? That’s like a jazz performance with Trump — leaving clues, withholding punches.

What’s Next? Business Prospects and Market Jitters

While trade hogged the limelight, Wall Street’s setting its sights on Trump’s pro-business moves. Who could forget his election campaign promises about trimming regulations? It sent banking stocks through the roof back in November. Banking regulations, small caps, oil stocks, and even bitcoin are watching his every move.

Trump, after all, boldly declared a national energy emergency to amp up fossil fuel production, firmly inserting himself into the annals of energy history. It’s New York bound to pay attention.

In one powerful inaugural pitch, he heralded a "new era of growth," strongly criticizing the previous Biden Administration. Donald Trump might just be setting the stage for a dramatic New York-style real estate growth saga. And remember, it’s just day one. Hold onto your hats!