Global markets experienced high volatility during Donald Trump’s first day as US President, driven by concerns over potential tariffs.
Major asset classes, including stocks, currencies, and commodities, fluctuated as investors speculated about Trump’s trade and economic policies.
Initial Gains Reverse After Tariff Announcement
On Monday, European stocks rose after signals that initial tariffs might exclude goods from Mexico, Canada, and China.
US stock markets were closed for a holiday, but futures gained, and the US dollar weakened, boosting the euro and gold.
Bitcoin hit a record high above $109,000 before retreating, while oil prices declined due to energy policy uncertainties.
By Tuesday’s Asian session, Trump announced 25% tariffs on Canadian and Mexican imports starting February 1, reversing positive market trends.
The US dollar regained strength, pressuring the euro and other currencies, while US equity futures declined.
Safe-Haven Assets Surge Amid Risk-Aversion
Uncertainty around Trump’s policies drove investors to safe-haven assets like gold and the Japanese yen.
Spot gold rose 0.72% early Tuesday to $2,725 per ounce, the highest since November. The yen strengthened, with USD/JPY falling below 155.
“The dollar’s safe-haven appeal remains strong amidst tariff uncertainties,” noted strategist Dilin Wu, highlighting ongoing market caution.
Bitcoin retreated from its high to $103,000 as traders awaited clearer cryptocurrency policies from Trump’s administration.
Oil Prices Under Pressure
Crude oil prices fell for the third day after Trump announced plans to increase US production and reverse climate-focused policies.
WTI futures rebounded slightly to $76.89 per barrel in the Asian session, with Brent crude rising to $80.20.
Uncertainty remains over oil prices, as Trump’s approach to ending the Ukraine-Russia conflict could impact global supply dynamics.
Cryptocurrency and Energy Policies Await Clarity
Trump’s lack of clarity on cryptocurrency policies has left traders cautious, despite his earlier pro-crypto statements.
Both Bitcoin and meme coins linked to Trump surged and retreated, reflecting market uncertainty over regulatory changes.
Energy markets face further volatility as Trump’s promises of energy dominance clash with the potential impacts of his foreign policy.
