Global updates: Trump hits the ground running

US markets rose following the inauguration of Donald Trump as the 47th US President began to issue a raft of executive orders. However, the technology sector dipped sharply as the release of DeepSeek, a Chinese AI app, triggered concerns over the long-term prospects of more established players. 


  • Donald Trump took office as US President
  • President Trump announce tariffs on goods from Canada, Mexico and China
  • Interest rates fell in Europe and rose in Japan

Trump takes office: US markets rose following Donald Trump’s inauguration, as the 47th US President began to issue a raft of executive orders. However, the technology sector dipped sharply as the release of DeepSeek, a Chinese AI app, triggered concerns over the long-term prospects of more established players. In particular, Nvidia’s share price fell by almost 17% in one day, although it had rallied to some extent by the end of the month. The Dow Jones Industrial Average Index rose by 4.7% over January as a whole, while the Nasdaq Index rose by 1.6%.

“Protectionism leads nowhere. Trade war has no winners” Ding Xuexiang

Tariff announcements: following his inauguration, President Trump  announced tariffs of 25% on imports from Canada and Mexico, and a levy of 10% on goods from China. The news raised concerns about the prospect of renewed inflationary pressures that were calmed to some extent by a subsequent delay to the levies on Canada and Mexico. President Trump is also expected to impose tariffs on imports from the EU. At the World Economic Forum in Davos, China’s vice-premier Ding Xuexiang  said: “Protectionism leads nowhere. Trade war has no winners”. 

Fed maintains rates … policymakers at the Federal Reserve (Fed)  left the key federal funds interest rate unchanged at 4.25% to 4.5%.The decision had been widely anticipated, but President Trump  responded by criticising the central bank’s response to inflation.

… the ECB cuts … as expected, the European Central Bank (ECB)  cut its key interest rate by 25 basis points to 2.75%. The eurozone’s rate of inflation  rose from 2.2% to 2.4% in December, reaching its highest level since July; nevertheless, further cuts are widely expected. Economic growth in the eurozone  stagnated during the final quarter of 2024; having contracted by 0.3% during 2023, Germany’s economy  shrank for a second consecutive year in 2024, contracting by 0.2%. Nevertheless, the Dax Index rose by 9.2% over January and hit a new high, boosted by optimism over the prospect of further monetary easing.

…. and Japan tightens: the Bank of Japan (BoJ)  raised its key interest rate by about 25 basis points to “around 0.5%” in January. Rates are now at their highest level  since 2008, with further increases expected. The BoJ  said it would “continue to raise the policy interest rate and adjust the degree of monetary accommodation”. The Nikkei 225 Index  fell by 0.8% in January.


To view the series of market updates through January, click here