Donald Trump’s victory in the NovemberUS presidential electionsparked an immediate rally in markets, with stocks flying, the dollar soaring andBitcoinleaping off the charts. But just two months later, the Republican is set to return to the White House, and only some of those trades endure.The reversal was first apparent in the stock market, where the S&P 500 Index gave back a solid chunk of its “Trump bump” as investors began to question the Federal Reserve’s anticipatedinterest rate cutsand what the new administration’s policy proposals will mean for share prices. TheTreasury yield curvehas also steepened sharply since late November after flattening initially. Meanwhile, Bitcoin and the dollar have held their gains.But the real test for these bets comes now, as Trump takes office. Tariffs are the biggest risk, sparking fears that the administration’s plans could lead to more prolonged and unpredictable trade wars than during his first presidency. Wall Street pros also worry about how any actions on immigration will affect the US economy. And they fear heightened geopolitical tensions with Trump already taking aim at some traditional US allies like Canada, Mexico and Europe.“Forecast is the polite way to say guess, but we have to make assumptions about these policies because they will affect the economic outlook,” Citigroup’s chief US economist Andrew Hollenhorst said on a 2025 forecast call.Here’s a look at the assets and sectors that traders are watching as the new administration takes over.StocksThe initial rush of Trump euphoria showed up quickly in some beaten down corners of the stock market, like small-capitalization companies. The Russell 2000 Index jumped 5.8% on the day after the election for its best session in two years. The logic was simple: The incoming administration’s protectionist trade policies would most help the group that typically generates the bulk of itsrevenueat home.But the enthusiasm quickly faded. The index soared 8% from Nov. 5 to Nov. 25, and then proceeded to give back much of that gain over the ensuing weeks.“Since so many of these stocks are marginally profitable or outright unprofitable, they are reliant upon funding to stay afloat, and higher rates hurt that narrative,” said Steve Sosnick, chief strategist at Interactive Brokers.Bank stocks experienced their own post-election frenzy, as Trump promised to ease regulations on lenders. The KBW Bank Index leaped almost 14% from Nov. 5 to Nov. 25, when it hit a 52-week high. After that, however, it lost momentum, retreating 1.8% through Friday.Shares of energy companies also caught a post-election bid based on Trump’s “drill-baby-drill” stance on oil and gas production. The S&P 500 Energy Index climbed 3.5% on Nov. 6 for its best session in a year, and rose 6.5% from Election Day through Nov. 22. Since then however, it’s been on a turbulent ride, losing 3.2% amid fears of oversupply, tariffs and economic growth.The stock mark
Dom. Gen 19th, 2025
