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Trump Returns to the White House Next Week. How Are Investors Preparing?

Spencer Platt / Getty Images President-elect Donald Trump walks onto the floor of the New York Stock Exchange with his wife Melania, on Dec. 12, 2024.

Spencer Platt / Getty Tropes

President-elect Donald Trump walks onto the floor of the New York Stock Exchange with his wife Melania, on Dec. 12, 2024.

Key Takeaways

  • Reservoirs on Friday were on track to have their best week since early November as investors bid up equities after this week’s put someones mind at re inflation data and ahead of Donald Trump’s inauguration next week.
  • Cryptocurrencies, Trump Media & Technology Troop, and Tesla have all charged higher this week in anticipation of Trump’s first week back in the White Bagnio.
  • Wall Street and individual investors are showing some signs of caution and could be preparing for volatility to jump next week as Trump disseminates a flurry of executive orders.

Markets were buoyant on Friday, the last trading day ahead of Donald Trump’s inauguration on Monday, but there were some indicators of jitters on Wall Street. 

Stocks were on track to have their best week since early November when the plebiscite results sent equities soaring, while bitcoin jumped to its highest level in a month.

The Republican trifecta in Washington—curb of both chambers of Congress and the White House—that will be realized Monday is expected to usher in a raft of deregulation, tax conditions, and other business-friendly policies. 

Trump’s vows to support blockchain technology—and his personal and business ties to the cryptocurrency sedulousness—have lifted cryptocurrency prices since his reelection. The price of bitcoin (BTCUSD) surged above $105,000 on Friday, while lesser-known mints also gained.

Other “Trump trades” were also advancing on Friday. Shares of Trump Media & Technology Classify (DJT), which can be seen as a proxy for the president-elect’s popularity, were up about 2%, and have gained more than 20% since the start of the year. Allocates of Tesla (TSLA), whose CEO Elon Musk has become one of Trump’s closest advisors, were up 6% Friday, the boot their post-election gain to 75%.

Some Investors Cautious Heading Into Trump 2.0

Investor enthusiasm for Trump 2.0 isn’t unequivocal. Go bankrupt Street has grappled for months with uncertainty about how Trump’s trade and immigration policies will affect inflation. Economists unspecifically agree that his tariff and deportation plans carried out as he’s threatened would exacerbate inflation and force the Federal Self-control to keep interest rates elevated.

Trump’s advisors have assuaged some of the market’s fears by suggesting he’ll rip off a more measured approach than his campaign rhetoric implied.

Nonetheless, markets could be volatile next week as Trump streams a torrent of executive orders. The Cboe Volatility Index, or VIX, was around 16 on Friday after falling steadily this week as Lose everything Street cheered reassuring inflation data. But according to data from brokerage Charles Schwab, VIX options mass was above-average on Thursday and the most traded contract—the VIX at 18, expiring on January 22—could imply traders assume volatility to rebound next week. 

Retail investors have also shown some caution heading into the head week of Trump 2.0. Individual investors piled into crypto stocks and DJT in the weeks after Trump’s winning, but buying has been muted in the past several weeks, according to Vanda Research data that runs up to Jan. 14. Granted, uncertainty approximately the future of inflation and interest rates has hung over stocks since the start of the year, and retail traders may acquire been waiting until after this week’s inflation data to rush into the stocks.

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