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In a recent webinar, I mentioned that markets like to end the week on a high ahead of a national holiday. The weekend before Martin Luther King Jr. Day and the Presidential Inauguration was no exception, as all the indices and their respective ETFs we follow closed in the green.

The inauguration of Donald Trump as the 47th President marks the transition from one political era to another, and this week, we have seen markets react to this new reality with some dramatic price action and volatility, not least owing to President Trump’s relentless use of social media.

It was quite a ride during his first Presidency, and there is no reason to suppose it won’t be the same again this time. Indeed, the apparent backtracking on tariffs drove the US dollar lower and stocks higher.

Whether this will continue remains to be seen, but by Friday, our indices and ETFs had all pulled back as a combination of profit-taking, next week’s heavyweight earnings from companies such as Apple, Microsoft, Meta, and Tesla, and the FOMC. And, of course, we always have the Trump tweets.

From a technical perspective, the SPX & SPY took out their all-time highs, while the NDX and QQQ have yet to do so. However, with next week’s earnings, these two may catch up. As always with earnings, expect a strong reaction on the release of the numbers and further volatility during the subsequent call.

With all this in mind, it’s perhaps not surprising markets took a breather on Friday. Have a great weekend.

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