1. Market Optimism as Trump Takes Office

Donald Trump’s inauguration on January 20 brought a wave of optimism to the markets. Investors felt a temporary relief as hopes rose for a potential delay in Trump’s promised tariff hikes.

2. Trade Policy Uncertainty

Before taking office, Trump announced a 60% tariff on Chinese goods but held off on immediate action, opting to review trade ties first. Speculation grew over his next move, particularly as he hinted at imposing duties on Canadian and Mexican goods as early as February 1.

3. Positive Reactions on Bursa Malaysia

The local stock market reflected the optimism, with Bursa Malaysia rising for the third straight session on January 21.

- The FBM KLCI closed up 8.12 points (+0.52%) at 1,580.46, trading within a range of 11.35 points.

- Most indices ended higher, except for the Bursa Malaysia Real Estate Investment Trust (REIT) Index.

4. Wall Street Gains Despite Uncertainty

Wall Street followed suit, with major indexes rising as investors assessed Trump’s early executive orders. However, uncertainty lingered as Trump remained vague on his universal tariff and surcharge plans.

- Winners: Automakers like General Motors (+1.6%) and Ford (+0.8%) gained, benefiting from reduced fears of immediate tariffs.

- Losers: Apple fell 3.7% following lukewarm analyst outlooks, and Tesla dropped 3.1%.

5. Inflation and the Federal Reserve

While last week saw the S&P 500 and Dow post their largest weekly gains since November, concerns over inflation remained.

- Inflation is still above the Federal Reserve’s 2% target, sparking fears that Trump’s policies could disrupt the Fed’s plans for easing monetary policy.

- Economists expect the Fed to hold rates steady in its next meeting, with potential cuts predicted by July.

The Road Ahead: What’s Next for Markets?

As Trump’s administration begins its first 100 days, all eyes are on his next moves. Trade policies and tariffs will heavily influence global market directions, keeping investors on edge.