Dollar falls while US stocks close higher after Trump inauguration
Some investors are worried about the tone of the former reality TV star’s speech
The dollar ended down while US stock indices rose in the last day of a choppy trading week, as investors reacted to President Donald Trump’s inaugural speech.
US stocks started the day higher but gave up some gains after Trump started speaking.
Some investors worried about the tone of the former reality TV star’s speech and others saw more negativity than optimism in his words.
US Treasury yields fell from two-and-a-half-week highs after the speech on concerns fiscal stimulus efforts may be delayed.
The dollar, which has lost some momentum in recent weeks, was off 0.3 per cent against six major currencies.
There has been a pause in the post-election market rally in risky assets such as equities amid questions over how Trump’s administration will carry out ambitious campaign promises of lower taxes, more government spending and looser regulations.
“I think folks priced in the good stuff in that first month and now they’re worried about inflation and what’s the Fed going to do, and a stronger dollar and trade wars and tariffs and the like,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.
While stocks fell during Trump’s speech, Friday’s session marked the first time in more than 50 years that a new US President was welcomed by a rising market on his first day, according to Reuters data.
Trump promised to put “America first” and that the US would buy American and hire American. “There’s a concern about what his trade policies will be,” said Jamie Cox, managing partner of Harris Financial Group, after he attended the inauguration in Washington DC.
“That’s probably the No 1 area where Trump will have to tone down his rhetoric because we do have to work with other nations.”
The Dow Jones Industrial Average was up 94.85 points, or 0.48 per cent, to 19,827.25, the S&P 500 had gained 7.62 points, or 0.336619 per cent, to 2,271.31 and the Nasdaq Composite had added 15.25 points, or 0.28 per cent, to 5,555.33. All three indices fell for the week.
The MSCI all world stock index was up 0.4 per cent on the day but was poised for a weekly decline. Benchmark 10-year notes fell 3/32 in price to yield 2.47 per cent, after earlier rising to 2.51 per cent.