Markets hang on Trump's every word

If Donald Trump’s goal was to show everyone that he was serious about his campaign promises, his first day in the Oval Office has accomplished just that.

Here are a few of the new president's policy announcements, and how they’ve helped (or hurt) markets today:

• Trump suggested a 25% across-the-board tariff on Mexico and Canada as soon as Feb. 1 in retaliation for “allowing vast numbers of people” to cross the US border. Mexico’s peso and Canada’s dollar both fell on the news. The US dollar dropped Monday, before recovering throughout the day today.
• The president declared an “energy emergency,” and promised to “drill baby, drill” during his inaugural address. Oil declined today on the news that more supply could be on the way, while oil stocks rose slightly across the board, and renewable energy stocks plummeted.
• Trump plans to pour billions into an AI infrastructure initiative led by a joint venture combining OpenAI, SoftBank, and Oracle. Oracle shares rose 7.21%.
• He reversed one of his predecessor’s executive orders mandating that half of all new vehicles sold in the US by 2030 had to be electric. Tesla shares fell 0.57%.
• Trump also signed an executive order to delay TikTok’s ban—keeping the app alive for all of you who don’t follow Morning Brew on Instagram reels.

But what Trump didn’t say moved markets just as much as what he did.

• Trump held off on imposing heavy tariffs, giving investors hope that maybe those tariffs won’t be imminent, or won't be as harsh as Trump’s previously proposed 60%. “In our base case, we expect the effective tariff rate on China to rise to 25-30% (from 10% currently). We also expect measures to protect technological interests, rules limiting transshipment, and tariffs on EU autos and pharmaceuticals,” explained CIO Equities Europe at UBS Rolf Ganter. Chinese stocks like BYD rose 3.77%.
• Michael Saylor’s bitcoin trojan horse software company MicroStrategy dropped 1.87%, despite the fact that bitcoin reached a new record high yesterday. Why? Trump didn’t mention bitcoin at all during his inaugural address.

The big picture: If there’s one thing we know for sure, it’s that traders are hanging on Trump’s every word. And given his frequent policy flip flops (just look at TikTok), it’s already become clear that investors are in for a roller coaster ride over the next four years.—LB