"No Tariff Bombshell"... New York Stock Market Starts Up on First Trading Day of Trump’s Second Term

Donald Trump Inaugurated as 47th U.S. President
Confirms Tariff Principles... New Tariff Measures Put on Hold
Treasury Yields and Dollar Value Decline
Market Focuses on Pro-Business Policies in Trump’s Second Term

The three major indices of the U.S. New York Stock Exchange all rose in early trading on the 21st (local time), the first trading day after President Donald Trump's inauguration. As 'Tariff Man' President Trump confirmed only the broad principles of tariff imposition on his first day in office, investors who had feared a 'tariff bomb' are feeling relieved. Treasury yields and the dollar value are declining.

As of 11:18 a.m. in the New York stock market that day, the Dow Jones Industrial Average (Dow), centered on blue-chip stocks, was trading at 43,870.13, up 0.88% from the previous day. The S&P 500, focused on large-cap stocks, rose 0.51% to 6,027.19, and the tech-heavy Nasdaq was up 0.15% at 19,659.02.

The day before, President Trump, who returned to the White House after four years, ordered a complete review of existing trade agreements. In his inaugural speech, he said, "We will make Americans wealthy by imposing tariffs on foreign countries." However, despite issuing dozens of executive orders on borders, energy, and other issues, new tariff measures were temporarily put on hold. Investors interpreted this as a signal that President Trump would impose tariffs gradually due to inflation concerns. Until now, the market had been worried that tariff hikes would lead to higher import prices and a rebound in inflation.

President Trump told reporters at the White House the day before that he was not yet ready to impose a universal tariff of 10-20% on all imports. He said the 25% tariffs announced for Mexico and Canada were under review for implementation on February 1. Regarding China, he indicated that tariffs could be imposed if the sale of the Chinese video-sharing platform TikTok was not approved, leaving room for negotiation.

Alex Phillips, Chief Political Economist at Goldman Sachs in the U.S., analyzed, "President Trump's tariff policy announcement on inauguration day was more moderate than expected," adding, "For now, the priority of (tariff policy) is lower than we anticipated."

The market is paying attention to whether the second Trump administration will fulfill its pro-business pledges. During his candidacy, President Trump promised to lower the top corporate tax rate and ease regulations. The day before, he declared a national energy emergency to expand fossil fuel drilling and production, including oil.

With concerns over tariff-driven inflation easing, Treasury yields and the dollar value are weakening. The yield on the 10-year U.S. Treasury note, a global bond yield benchmark, is currently at 4.56%, down 4 basis points (1bp=0.01 percentage point) from the previous trading day. The yield on the 2-year U.S. Treasury note, sensitive to monetary policy, remains steady at 4.27%.

The dollar value is also declining. The Dollar Index, which measures the U.S. dollar against the currencies of six major countries, is down 1.1% from the previous trading day, standing at 108.

By stock, 3M surged 4.73% after reporting earnings that exceeded expectations. AI leader Nvidia rose 0.94%, and Amazon increased by 1.53%. Bank stocks are also rising on expectations of regulatory easing. JPMorgan Chase and Bank of America (BoA) rose 1.01% and 1.2%, respectively.

International oil prices are falling amid expectations of increased supply due to President Trump's expansion of oil production. West Texas Intermediate (WTI) crude oil fell $1.36 (1.76%) to $76.03 per barrel, and Brent crude, the global oil price benchmark, dropped $0.66 (0.82%) to $79.49 per barrel compared to the previous day.