In anticipation of President-elect Donald Trump becoming the 47th president of the United States, investors are confident that the U.S. stock market will see a positive reaction - similar to when he was inaugurated in 2017.
Trump is entering office with high economic expectations since he has promised lower inflation, lower taxes, increased domestic business, affordable housing, tariffs on foreign goods, looser regulations and more.
That, combined with his experience as a businessman, has made investors “enthusiastic” about his return to the White House.
“Investors have been enthusiastic about the potential loosening of regulations and possible reduction in corporate and business income taxes,” Sam Stovall, the chief market strategist at CFRA Research, told Reuters.
A majority of Americans have a positive expectation of the economy in 2025 because of Trump. In one poll from CBS News and YouGov, 52 percent of people said they have “good” expectations for the economy. Meanwhile, 56 percent believe the economy now is “bad”.
Although the U.S. stock market was closed on Monday in recognition of Martin Luther King Jr. Day, financial futures looked positive.
Dow futures, the financial prediction market to help investors speculate about the Dow Jones Industrial Average market index, was up on Monday. S&P, Nasdaq and Russell futures were also all up.
When Trump was first inaugurated in 2017, the S&P 500 had a 0.34 percent gain. Over his first 100 days in office, it rose 5 percent and in four years it rose roughly 19 percent – that is until the pandemic when it plummeted.
But even while the U.S. stock market saw a steady rise over Trump’s four years in office, it still experienced dips as he steered the U.S. into a trade war with China.
European markets traded lower on Monday in anticipation of Trump returning to power. The president-elect has threatened to impose tariffs on the European Union unless they buy more U.S. gas and oil.
In addition to the traditional stock market, cryptocurrencies were performing well ahead of Trump’s inauguration because the incoming president and incoming first lady have launched their own crypto coin. Trump has also promised to promote digital currencies during his presidency.
The price of Bitcoin hit an all-time high on Monday.
