Stock Futures, Dollar Slides as Trump Talks Tariffs

As the first full day of Donald Trump's second presidency began, US stock market futures rose amid expectations of immediate actions by the incoming president that could boost the economy, particularly in sectors like banking and energy. However, traders were also encouraged by news that Trump would not immediately impose new tariffs on day one. The Dow Jones Industrial average futures gained 122 points, or 0.3%, while S&P 500 futures added 0.3%, and Nasdaq-100 futures rose 0.4%. Regular trading on the New York Stock Exchange and Nasdaq was closed for the Martin Luther King Day holiday, but there was limited futures trading.

Stanley Druckenmiller, chairman and CEO of the Duquesne Family Office, expressed his optimism about the market's prospects under Trump's leadership. "CEOs are somewhere between relieved and giddy...we are a believer in animal spirits," he said in an interview during CNBC's special inauguration coverage. Druckenmiller, considered one of the best ever hedge fund managers, did have some caution on the overall market because of rising interest rates.

Trump is expected to unveil a flurry of executive actions on Monday, which investors will evaluate for their impact on the economy. A trade memorandum from the new administration is not expected to impose tariffs yet but will ask for investigations of China, Canada, and Mexico for unfair trade practices and currency policies. Elsewhere, the President-elect will declare a national energy emergency, with the goal of lowering high costs. It will expand the president's legal options for allowing drilling in Alaska and other areas. Other executive actions to come Monday are likely to address business deregulation and immigration restrictions.



The dollar, which has been gaining in recent months in anticipation of Trump's second term, edged lower Tuesday after rising on news of Trump's proposed tariffs. WTI crude oil, the US benchmark, was down 1.8% Tuesday after Trump announced executive orders focused on reversing regulations and enabling the drilling of oil in the US. The yield on the 10-year Treasury note fell, boding well for stocks.

The Russell 2000 index, which tracks smaller companies, gained 1.8% during afternoon trading. Trump inherits a strong stock market, with the S&P 500 gaining almost 4% from his election in November until inauguration day, according to Sam Stovall, chief investment strategist at CFRA Research. That was the 11th best performance since 1944 during the "post-election honeymoon period," he wrote in a note. Positive performance during that period has been a signal for gains during both the first 100 days of the presidency and the entire year almost 80% of the time, according to Stovall.

Investors will be keen to see whether the good times can keep rolling under the Trump administration. Markets have already adjusted to expectations of a business-friendly Trump administration, said Clark Geranen, chief market strategist at CalBay Investments, in an email. "While Tuesday is the first trading session under Trump 2.0, markets are forward looking, and much of the optimism over the potential for tax cuts and deregulation is already priced in, via the post-election stock market surge, which stocks have held onto for the most part," Geranen said.



January's performance tends to portend, at least historically, the market's performance for the full year. The next 10 days will be important for markets. Fear was the sentiment driving the market Tuesday, according to CNN's Fear and Greed Index, although sentiment has improved since January 15, when inflation data came in cooler than expected. The VIX, Wall Street's fear gauge, fell more than 5% Tuesday afternoon.

Charles Schwab (SCHW) stock surged early Tuesday and was up 6% after the brokerage giant reported earnings that exceeded expectations. Charles Schwab posted $5.3 billion in revenue in the fourth quarter of 2024, up 20% from the same period a year earlier. Apple (AAPL) stock fell almost 4% after it was downgraded by analysts. Net