• USD rises; Mexican peso & Canadian dollar weaken on proposed tariffs
• S&P500 struggles amid tariff hints, corporate earnings in focus
• China stocks show resiliency, tariff delays ease concerns
• Oil steady; energy policy set to boost domestic output
• Gold rises as trade fears and inflation risks strengthen

Donald Trump has been inaugurated and is now serving his second term as the 45th President of the United States.

Following the inauguration, Trump has already set in motion a number of important initiatives and executive decisions aimed at fulfilling his campaign promises.

Here is how some of these key decisions have impacted the markets so far:

• US Dollar (USDInd) vs Mexican Peso (MXNUSD) and Canadian Dollar (USDCAD)

The dollar index hit 108.7 on Tuesday, rebounding after President Trump proposed 25% tariffs on Canada and Mexico. While fears of Trump's policies pushing up CPI have boosted the dollar since October 2024, cooling inflation has rekindled expectations for two Federal Reserve rate cuts this year. The Canadian dollar and Mexican peso, however, saw sharp declines, with USDMXN and USDCAD up 1.38% and 0.86%, respectively.

• S&P500 Stock Index (US500)

The major U.S. stock index struggled Tuesday after President Trump hinted at a 25% tariff on Canada and Mexico by Feb. 1. The president also mentioned China, but did not go into detail. The focus remains on Trump's pro-business agenda (including promised tax cuts), with key earnings reports due this week and in the coming weeks.

• China H Shares Stock Index (CHINAH)

Chinese equities are showing resilience following President Trump's decision to delay the implementation of sweeping tariffs on Chinese imports, providing temporary relief as the CHINAH index remains above the 7,300 level.

Trump's focus on the domestic agenda (i.e., the southern border) rather than immediate action on China has increased some of the market's near-term concerns.

• Brent (BRN)

Brent crude hovered just above $78 per barrel on Tuesday following Trump's declaration of a national energy emergency, which prioritizes US domestic energy production through expanded oil and gas drilling, particularly in previously restricted areas.

Easing geopolitical tensions in the Middle East have also put pressure on oil prices. Markets are now awaiting clarification on potential sanctions against major exporters such as Russia, Iran and Venezuela.

• Gold (XAUUSD)

Gold briefly topped $2,730 an ounce on Tuesday as investors assessed the impact of President Trump's policies. A proposed 25% tariff on Mexican and Canadian goods sparked fears of a trade war, boosting the appeal of safe-haven assets such as gold.

Concerns about inflationary risks associated with Trump's proposed tax cuts and spending plans may limit the Fed's ability to ease monetary policy, which could impact zero-yielding gold.

On the geopolitical side, the recent ceasefire agreement in the Middle East has also weighed on gold prices.

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