President Trump’s second term kicked off with record executive orders, legal battles, and sharp policy pivots. His first 100 days have already created ripple effects across markets—from stock volatility to shifts in currency and credit dynamics. Below are key takeaways that show how political momentum is now driving market behavior.
One Hundred Days of Attitude
1. Stocks Rally Globally as Risk Appetite Returns
Global stock markets rebounded strongly last week, led by U.S. tech and industrial names. The S&P 500 rose nearly 3%, and the Nasdaq erased all losses since early April. Outside the U.S., Asian equities outperformed, with Taiwan's TAIEX up 4.6% and Japan's Nikkei rising over 3%. The sharp recovery signals a shift in investor sentiment toward riskier assets. Investors rotated out of safe havens like gold and into equities, suggesting growing optimism about global growth and policy stability. The rally also reflects improving earnings expectations and easing concerns over monetary tightening.
2. Trump’s First 100 Days Bring Market Volatility and Policy Shifts
President Trump’s second term has started with aggressive policy moves. In his first 100 days, he issued a record 143 executive orders and introduced controversial immigration and trade policies, sparking over 220 lawsuits. Market reaction has been mixed: the S&P 500 saw a sharp drawdown at one point, and disapproval ratings rose above approval. A shift from weak to strong dollar messaging also created uncertainty. Investors are watching how these rapid political moves will shape market direction, particularly around tariffs, fiscal policy, and legal risks.
3. U.S. Credit Market Shows Stress, Especially in High-Yield Bonds
The corporate bond market is sending warning signs. Investment-grade bonds returned +2.36% in Q1 2025, while high-yield barely managed +0.94%. The yield gap between A-rated and B-rated bonds has widened to 271 basis points, near cycle highs. This reflects investors demanding more compensation for risk as macro uncertainties rise.
4. BOJ Holds Rates Amid Weak Growth, While ECB Keeps Cutting
The Bank of Japan held interest rates at 0.50%, even as it lowered its growth and inflation outlook due to global trade tensions. The yen weakened as markets interpreted the pause as dovish. Meanwhile, the European Central Bank continues its easing cycle, cutting rates seven times this year. Eurozone GDP beat expectations, but confidence across consumers and businesses is slipping. Inflation in Europe is falling, giving the ECB room to cut further.
5. Taiwan Dollar Surges to Record Weekly Gain
The Taiwan dollar posted its strongest weekly gain ever, rising over 4% and briefly breaking below 30.5. This move reflects broad strength in Asian currencies and strong equity inflows into Taiwan’s tech-heavy stock market. While the U.S. Dollar Index remained stable, demand for risk assets pushed investors into regional currencies. Taiwan’s rally also suggests optimism around supply chain shifts and resilient export demand. However, such sharp currency appreciation could pressure Taiwan’s central bank to intervene or reassess its policy stance to maintain export competitiveness and manage inflation expectations.
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