[New York Stock Market] "Thank You Trump" Rises on Low Interest Rates and Low Oil Price Remarks... S&P 500 Hits Record High

Trump Delivers Virtual Speech at Davos Forum
"Urges Fed to Cut Rates, Asks Saudi Arabia to Lower Oil Prices"
Optimism Over Pro-Business Policies Fuels 'Trump Rally'

The three major indices of the U.S. New York Stock Exchange all rose on the 23rd (local time). The S&P 500 index, a representative stock index, hit an all-time high after U.S. President Donald Trump announced that he would urge the Federal Reserve (Fed) to cut interest rates and oil-producing countries to lower oil prices. International oil prices fell by about 1%.

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average (Dow) closed at 44,565.07, up 408.34 points (0.92%) from the previous trading day. The large-cap-focused S&P 500 index closed at 6,118.71, up 32.34 points (0.53%), setting a new all-time high. The tech-heavy Nasdaq index ended the day at 20,053.68, up 44.34 points (0.22%).

President Trump's speech at Davos acted as a catalyst for the stock market rally, which had been fluctuating in a narrow range.

In his virtual speech at the World Economic Forum (WEF, Davos Forum) held in Davos, Switzerland, he pressured the Fed to cut interest rates for the first time since taking office ahead of the rate decision on the 29th. President Trump said, "I will demand an immediate rate cut," adding, "Interest rates should come down globally, and rates should follow us."

He also expressed his intention to request oil-producing countries in the Middle East to lower oil prices to end the war in Ukraine. He said, "If oil prices fall, the Russia-Ukraine war will end immediately," adding, "Right now, prices are high enough to sustain the war. I will ask Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to lower oil prices." Following President Trump's remarks, international oil prices closed down by about 1%. West Texas Intermediate (WTI) crude fell 1.09%, and Brent crude dropped 0.9%.

Although the White House cannot control interest rates and oil prices, the market welcomed President Trump's remarks suggesting a low interest rate and low oil price stance.

Larry Tentarelli, Chief Technical Strategist at Blue Chip Daily Trend Report, said, "He (President Trump) cannot actually control interest rates, but the market likes to hear that kind of story," adding, "So far, the market seems to have positively evaluated President Trump's policies. We need to watch if there are any follow-up actions."

Neil Dutta, an economist at Renaissance Macro Research, analyzed, "Whether right or wrong, President Trump wants a positive supply shock in the energy sector," adding, "This will lower expected inflation and subsequently reduce interest rates."

Wall Street is paying attention to the pro-business policies of Trump's second term, launched on the 20th, spreading optimism in the market. The large-scale AI infrastructure investment plans by private companies announced shortly after President Trump's inauguration, expectations of corporate tax cuts and deregulation, and hopes for economic growth are driving investor sentiment. The fact that President Trump did not impose new tariffs on his first day in office also eased market concerns.

Employment data, which can confirm labor market trends, was also released that morning. According to the U.S. Department of Labor, new unemployment claims for the week of January 12-18 totaled 223,000. This was an increase of 6,000 from the revised figure of 217,000 the previous week but still maintained a solid state. The expert forecast (221,000) was also exceeded by 2,000 claims. Continued unemployment claims, which represent those claiming benefits for at least two weeks, reached 1,899,000 for the week of January 5-11, marking the highest level in 3 years and 2 months.

Government bond yields varied by maturity. The U.S. 10-year Treasury yield, a global bond yield benchmark, rose 4 basis points (bp) (1 bp = 0.01 percentage points) to 4.64% despite President Trump's remarks, while the 2-year Treasury yield, sensitive to monetary policy, remained around 4.28% from the previous trading day.

By stock, American Airlines fell 8.74% due to weak earnings forecasts. Netflix, which had previously posted surprise earnings, rose 3.24% again that day. Nvidia increased by 0.1%, and Microsoft (MS) rose 0.11%.