Trump 2.0: Major Policy Overhaul Reshapes US Markets

4 MINS READ

Team BitDelta Pro • 21 Jan 2025

FinancialPolicyUS Market
4 MINS READ Team BitDelta Pro • 21 Jan 2025
Trump 2.0: Major Policy Overhaul Reshapes US Markets

On January 20, 2025, as Donald Trump embarked on his second term, he unleashed a torrent of executive orders, signalling a dramatic policy shift across various sectors, which traders and investors should closely monitor for market implications.

Immigration and Border Security

  • National Emergency Declaration: Trump declared a national emergency at the US-Mexico border, authorising the deployment of military forces, including the National Guard, to bolster border security. This move is anticipated to ramp up spending on defence and security contractors.
  • Border Wall Continuation: With the resumption of border wall construction, companies in construction, security technology, and infrastructure could see a surge in demand.

Immigration Policy Overhaul

  • Ending Birthright Citizenship: A policy aimed at reducing incentives for illegal immigration, potentially affecting labour markets in sectors like agriculture and service industries.
  • Refugee Program Suspension: A six-month pause on refugee admissions could influence sectors dealing with international aid and resettlement services.
  • Asylum Policy Changes: The “Remain in Mexico” policy’s revival will increase demand for border management services and could lead to legal challenges, affecting market stability.
  • Deportation Initiatives: With enhanced deportation measures, private prison companies might see growth, while labour markets face potential disruptions.
  • Cartel Designation: Labelling certain cartels as terrorist organisations could lead to heightened security measures, impacting trade routes and logistics firms.

Economic and Trade Measures

  • TikTok Policy Review: The 75-day extension on the TikTok ban could sway investor sentiment in the tech sector, particularly for companies with ties to ByteDance or similar entities.
  • Tariff Proposals: Plans for up to 25% tariffs on Canadian and Mexican goods could reshape trade dynamics, affecting industries reliant on cross-border trade.
  • External Revenue Service: Aiming to improve customs duty collection, this could introduce new administrative burdens or opportunities for logistics and customs consulting firms.
  • Inflation Combat Measures: Emergency consumer relief could signal increased government spending, impacting bond markets and currency values.
  • Trade Review: A reassessment of trade with major partners like China, Canada, and Mexico might result in volatility in sectors sensitive to trade policies.

Energy and Climate Policy

  • Paris Agreement Withdrawal: This signals a US pivot back to fossil fuels, potentially boosting oil and gas sectors while challenging renewable energy investments.
  • Offshore Drilling Expansion: Opening new areas for drilling could benefit oil exploration companies but face environmental and legal pushback.
  • Strategic Petroleum Reserve: Plans to refill could influence oil prices globally.
  • Regulatory Rollbacks: Cancelling efficiency standards on appliances and reversing EV mandates could tilt the market towards traditional energy companies while reducing demand for green tech.
  • Wind Farm Leasing Cancellation: This will likely impact renewable energy developers but could spur interest in alternative energy investments.

Federal Workforce and Government Operations

  • Return-to-Office Mandate: This could stimulate demand for office space and services but might also challenge federal workers’ unions.
  • Hiring Freeze: Exceptions for critical roles suggest continued investment in defence and security, potentially benefiting related industries.
  • Regulatory Review: Suspended new regulations could provide short-term relief for businesses but create uncertainty.
  • DEI Initiative Termination: This could affect diversity consulting and training sectors, signalling a shift in corporate culture expectations.

Healthcare and International Relations

  • WHO Withdrawal: This could affect global health policy and international operations in pharmaceutical sectors.
  • Military Vaccine Mandate Reversal: This might influence health sector stocks, particularly those involved in vaccine production.

Cultural and Social Policy

  • Gender Policy: A two-gender policy might lead to legal battles and social unrest, influencing sectors from education to healthcare.
  • DEI Program Cuts: This could shift the focus of educational institutions and corporations towards different priorities.

The sweeping policy changes on President Trump’s first day in office mark a decisive shift in the US political and economic landscape. Immigration, energy, and trade policies are key focus areas, with ripple effects across multiple industries. While traditional energy and defence sectors could benefit from the administration’s immediate actions, technology and renewable energy may face challenges. These changes, coupled with potential trade tensions and regulatory rollbacks, create a dynamic environment for investors and businesses. Monitoring these developments will be crucial as markets adjust to this strategic overhaul.

Sector-Specific Reactions

  • Technology: Despite initial gains, tech stocks, especially those with significant international exposure or reliance on global supply chains, faced uncertainty due to potential tariff implications.
  • Energy: Traditional energy stocks might have seen an uptick with the policy shift towards fossil fuels, although immediate market reactions might have been tempered by broader market concerns.
  • Defence and Security: Companies in these sectors could have seen positive movements due to increased border security measures.
  • Currency and Bonds: The US dollar strengthened against some currencies, particularly in response to potential trade policies, while bond yields showed mixed outcomes, with some suggesting that high valuations could lead to corrections if inflation accelerates due to new tariffs.

Technical Analysis

S&P 500

Outlook: Bullish

S&P 500 Index

NASDAQ

Outlook: Bullish

US 100

DISCLAIMER

This communication is for informational and educational purposes only and should not be construed as financial, investment, or legal advice. BitDelta Pro does not guarantee the accuracy, completeness, or timeliness of the information provided. Trading in traditional securities (such as forex currency pairs, stocks, bonds, and commodities) carries inherent risks, including potential loss of principal. Users are encouraged to carefully evaluate their financial objectives, conduct their own research, and seek independent financial advice before making any trading decisions. BitDelta Pro is not liable for any losses or damages resulting from actions taken in response to this communication.

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