It’s official. Donald Trump is scheduled to take office as the 47th US president on January 20, 2025. Media mogul, businessman and president, Trump continues to be a significant figure in American politics. And his policies and rhetoric have historically impacted various markets, influencing strategies for investors, brokers and exchanges. As a financial services marketing agency, we’re following this impact closely. Our team has rounded up some insights into what a Trump presidency could mean for the forex, stocks, and crypto markets. Let’s look at President Donald Trump and the financial markets
Initial Market Reactions
US elections move markets and yesterday was busy for our team of financial marketers! Markets and currencies around the world shifted sharply following the US election news. Here are some of the key financial market movements:
- US stock indexes soared, with banks performing particularly well
- The USD was up by about 1.65% against a host of different currencies, including the pound, euro and the Japanese yen.
- Shares of Tesla skyrocketed 14%, as CEO Elon Musk had endorsed Trump on X (formerly Twitter) and at election rallies.
- The euro dropped 1.89% against the US dollar to its lowest level since June.
- In Japan, the benchmark Nikkei 225 stock index ended the session up by 2.6%
- In mainland China, the Shanghai Composite Index ended 0.1% lower, while Hong Kong’s Hang Seng was down by around 2.23%
- The pound sank 1.16%against the US dollar to its lowest level since August
- The FTSE 100 index, comprising the largest companies listed in the UK, rose in early trading before closing marginally down
#1 Forex Market: A Catalyst for Volatility
Trump’s previous term from 2017 to 2021 was characterised by aggressive economic policies, including sweeping tax reforms and trade conflicts, especially with China. These policies often led to heightened currency market volatility. The USD dollar experienced pronounced fluctuations in response to trade negotiation updates, tariff announcements, and geopolitical events. It’s worth remembering though, that during his last presidency, enforced lockdowns also had an impact on the financial markets, the repercussions of which we are still seeing today.
With Trump as president, forex brokers can anticipate a similar environment of volatility-driven opportunities and risks. The USD may experience significant movement due to potential protectionist policies, monetary policy shifts, or renewed trade conflicts. Key currencies, such as the Chinese Yuan (CNY), Japanese Yen (JPY), and Euro (EUR), would also need close observation.
EXAMPLE: A return to hard-line trade policies could trigger rapid devaluation or appreciation cycles for USD pairs. Forex brokers should consider enhancing their risk management tools and strategies to mitigate client exposure during potentially sudden policy shifts.
Talk to our team about expert forex marketing.
#2 Stock Market: Sector-Specific Impacts
Donald Trump is often preferred by investors due to his pro-business policies that emphasise economic growth. During his presidency, corporate tax rates were slashed, resulting in higher profit margins for companies and, consequently, a robust stock market rally. His administration’s focus on reducing regulatory burdens on key industries like finance, energy, and manufacturing create a favorable environment for corporate expansion and investment. Investors also appreciate his emphasis on domestic economic initiatives, which boost sectors tied to infrastructure and energy. Overall, Trump’s policies tend to prioritise growth and profitability, aligning with investor interests in a thriving economy. So, it’s not a surprise that the stock market already reacted positively to a Trump presidency.
The stock market during Trump’s previous tenure saw considerable growth, bolstered by tax cuts and deregulation initiatives that favoured corporate earnings. Sectors such as financials, energy, and industrials performed well under his administration due to policies that supported infrastructure development and reduced regulatory burdens.
With Trump as president. certain sectors might again experience significant benefits. For instance, a focus on domestic energy production and infrastructure could boost energy and construction stocks. But on the flip side, industries like technology, which faced scrutiny during Trump’s trade battles with China, might encounter renewed pressure.
EXAMPLE: Stocks in the defence, oil, and construction sectors could surge on the expectation of favorable policies. Brokers and traders might need to adjust their portfolios, taking advantage of these sector-specific trends. Trump and the financial markets will likely pair well here.
#3 Crypto Market: Regulatory Uncertainty and Sentiment Swings
The Trump administration previously demonstrated a mixed stance toward cryptocurrencies. While outright bans were not enforced, there was significant emphasis on regulatory oversight. Unlike BTC bullish Harris, Trump has expressed scepticism about Bitcoin and other digital assets, contributing to periods of uncertainty in the crypto market. But he never ruled them out altogether and news of his presidency sent BTC soaring up.
The value of Bitcoin jumped by more than $6,600 (£5,120) to an all-time high of $75,999.04.
A potential Trump presidency could bring back such regulatory ambiguity, impacting crypto exchanges and traders. Increased scrutiny on digital currencies, more stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations, or executive orders targeting crypto assets could be expected. And we don’t think that’s necessarily a bad thing.
EXAMPLE: A renewed push for regulation could pressure major cryptos like Bitcoin (BTC) and Ethereum (ETH), leading to bearish trends or short-term corrections. Conversely, a policy stance that supports blockchain innovation could spark investor confidence, driving bullish sentiment.
Talk to our team about marketing for your cryptocurrency exchange
Trump And The Financial Markets: Strategic Takeaways for Brokers and Exchanges
It’s too early to be speculate on the long-term market impacts of this Trump presidency. But for now, we’ve prepared some takeaways for forex brokers and exchanges to be able to maximise their ROI.
- Enhance volatility management systems and maintain adaptable liquidity strategies.
- Closely monitor policy announcements and geopolitical developments to market the right assets.
- Pay close attention to changes on regulatory compliance.
- Deliver tailored daily analysis to your traders to prompt trading activity.
- Identify sectors likely to benefit from potential Trump policies, such as energy and defence. Build marketing campaigns around them.
- Be prepared for rapid shifts in technology and international-focused industries.
- Maintain transparent communication with your traders to reassure them amid policy changes.
Donald Trump’s return to the presidency is looking like positive news for the financial markets. Brokers, banks and crypto exchanges should remain vigilant, adaptable, and proactive, employing marketing strategies that work alongside the strongest currency in the world, the USD.
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