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Weekly Recap: Crypto Markets Surge Into Donald Trump’s Inauguration

Weekly Recap

Weekly Recap: Crypto Markets Surge Into Donald Trump’s Inauguration

Market Recap

On Friday, the S&P 500 closed at 5,996.66, up 1.00%, while the NASDAQ climbed 1.51% to finish at 19,630.20. The Dow Jones Industrial Average advanced 0.78% to close at 43,487.83. Over the past week, the S&P 500 gained 3.71%, the NASDAQ surged 3.84%, and the Dow Jones climbed 3.53%. Meanwhile, small caps, represented by the Russell 2000, jumped 4.57% to end the week at 2,275.88.

Rates subsided rapidly on Tuesday, sending stocks higher. The 10-year Treasury yield fell to 4.61%, and the two-year Treasury slipped to 4.23%. This movement followed an inflation report that raised hopes for further interest rate cuts by the Federal Reserve later this year. Meanwhile, the Dollar Index (DXY) remains strong, closing at 109.41.

On Wednesday, President Joe Biden delivered his farewell address. Donald Trump is set to be inaugurated on Monday, January 20, marking the day as a market holiday. Upon returning to the Oval Office, Trump is expected to sign more than 100 executive orders, including measures to restart fracking, implement crypto-friendly policies, and establish the External Revenue Service. Earlier today, IRS Commissioner Daniel Werfel announced that he will step down on Inauguration Day.

Rumors of Tariffs

In the financial media, there are rumors that the upcoming executive orders may include measures related to deportations and new tariffs. Earlier today, President-elect Donald Trump announced that he had a phone conversation with Chinese President Xi Jinping. “We discussed balancing trade, fentanyl, TikTok, and many other subjects. President Xi and I will do everything possible to make the world more peaceful and safe!” Trump wrote.

The Chinese Foreign Ministry stated that during the call, "President Xi stressed" that both nations "are pursuing their respective dreams" and, given their history of cooperation, should continue to be "partners and friends." President Xi Jinping’s special representative, Vice President Han Zheng, is scheduled to attend the inauguration ceremony on January 20. The Chinese Foreign Ministry added, "China follows the principles of mutual respect, peaceful coexistence, and win-win cooperation in viewing and growing its relationship with the United States."

For the time being, we believe the likelihood of new, broad-reaching U.S. tariffs on Chinese products is relatively low as both parties appear to be prioritizing negotiations.

On January 21, 2025, Treasury Secretary Janet Yellen is set to begin employing "extraordinary measures" to prevent the U.S. from hitting the debt ceiling. These measures include halting payments into certain federal accounts, such as the Civil Service Retirement and Disability Fund, during the transitional period as President-elect Donald Trump assumes office. Yellen’s actions aim to avert a default while urging Congress to address the debt limit promptly.

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