President Donald Trump has issued several executive orders focusing on inflation, energy, and immigration after his inauguration for a second term. However, he has delayed any action on tariffs until next month. Trump indicated he might impose a 25% tariff on Mexico and Canada starting February 1.
He also gave the Chinese-owned social media app TikTok 75 days to find a U.S. owner before potentially banning it in the U.S.
U.S. stock futures are on the rise as investors respond to Trump’s policies and prepare for upcoming corporate earnings reports. Futures on major indices are up by about 0.4%. Yields on the 10-year Treasury note are down, trading below 4.6%, while the U.S. dollar has weakened against a basket of currencies.
Oil futures have dropped by more than 2%, and gold futures are down 0.5%. Netflix stock is up about 1% in premarket trading ahead of its quarterly earnings report. Analysts anticipate that Netflix will report a 15% year-over-year revenue growth to $10.13 billion, with earnings rising to $1.84 billion, or $4.23 per share.
The stock has increased by more than 75% over the past 12 months. Following a surge ahead of Trump’s inauguration, bitcoin has pulled back slightly but is still trading at over $104,000, up 2% early Tuesday. The cryptocurrency’s price volatility has been notable, with shares of bitcoin buyer MicroStrategy down less than 1% in premarket trading.
Trump’s executive orders impact markets
Meanwhile, shares of crypto exchange Coinbase, bitcoin miner Mara Holdings, and Riot Platforms are higher. Apple shares are down nearly 2% in premarket trading after analysts at Jefferies downgraded the stock to “underperform” from “hold,” citing concerns over stunted demand for new features.
Jefferies set a price target of $200.75, compared to Apple’s Friday close of around $230. Data from research firm Canalys indicated that Apple has lost its position as China’s largest smartphone seller. Greg Valliere, Chief U.S. Policy Strategist at AGF Investments, remarked that “the presence of Silicon Valley executives signals a significant shift in power, indicating a likely continuation of a friendly regulatory climate for tech companies over the next four years.”
Despite the positive market tone, Longview Economics has issued a cautious trading recommendation.
Citing their observations of risk appetite models and put/call ratios, they note signs of market complacency, urging caution as the S&P 500 approaches key resistance levels. Investors are keenly anticipating earnings reports from several major companies. Before the market opens, Charles Schwab and D.R. Horton will present their figures.
After the closing bell, significant reports are expected from United Airlines, Interactive Brokers, Seagate Technology, and Capital One Financial. Richard Hunter, head of markets at Interactive Investor, said, “The muted market reaction to the President’s executive orders suggests relief among investors. However, the real tests will lie ahead as the impacts of potential tax cuts and regulatory changes become clearer.”
With the broader market sentiment appearing positive, eyes will remain on the earnings season and any further policy announcements from the White House.
Investors are hoping to see the rally sustain its momentum as Wall Street returns from the long weekend.
