Donald Trump's rise to the U.S. presidency was marked by a seriesof bold and unconventional policy proposals that many pundits deemed radical atthe time. Given the length of the campaign and the public nature of hisplatform, one would think that the market had plenty of time to prepare andprice in the potential policy shifts well in advance. However, it turned outthat investors were caught off guard by the extent of the upheaval that ensued.Indeed, the first 100 days of Donald Trump's presidency were characterised byextreme volatility and uncertainty for the global financial markets. In thisarticle, Octa broker reviews Trump's policies and analyses their consequencesfor the global financial markets.

Introduction

Donald Trump assumed office on 20 January 2025, and marketvolatility has been rising ever since. Some of Trump's initiatives,particularly his aggressive trade policies, have sent shockwaves throughequities, currencies, and commodities, leaving retail forex traders scramblingto adjust. Meanwhile, larger investors struggled to adapt to the rapid pace ofproposed reforms and their far-reaching consequences. Overall, the first 100days of President Trump saw heightened risk aversion and widespread uncertainty,which resulted in sharp fluctuations in asset prices and currency exchangerates as traders reacted to every policy announcement, tweet, and speech fromPresident Trump and his new administration.Below is a list of just a few of the notable days that shook the markets.

Major market-moving events

●20 January. The U.S. Dollar Index (DXY)dropped by more than 1.20% after news surfaced that the new administration willnot immediately impose trade tariffs, prompting a rally in the currencies ofsome U.S. trading partners: notably, the Mexican peso (MXN), the Euro (EUR) andthe Canadian dollar (CAD). It should be noted that prior to the sharp decline,the greenback had been rising almost uninterruptedly since September 2024,almost reaching a three-year high ahead of Trump's inauguration as the marketassumed that higher tariffs would spur inflation, prompting the Federal Reserve(Fed) to pursue a more hawkish monetary policy.

●1–3 February. In the future, historians maylabel 1 February as the official start of a global trade war. On this day,Donald Trump imposed a 25% tariff on imports from Canada and Mexico, along withan additional 10% tariff on China. The market's reaction was highly negative.U.S. stock futures slumped in early Asian trading on Monday, 3 February, withNasdaq futures down 2.35% and S&P 500 futures 1.8% lower. U.S. oil pricesjumped more than $2, while gasoline futures jumped more than 3%. Meanwhile, theCanadian dollar and Mexican peso weakened substantially, with USDCAD surgingpast the 1.47900 mark, a 22-year high, and USDMXN touching a 3-year high aseconomists warned that both countries were at risk of recession once thetariffs kick in. Later that day, Trump agreed to delay 25% tariffs on Canadaand Mexico for a month after both countries agreed to take tougher measures tocombat migration.

●3–5 March. This is when the market began toseriously worry about the health of the global economy and a risk-off sentimentbecame evident. As fresh 25% tariffs on most imports from Mexico and Canada,along with the 20% tariffs on Chinese goods, were scheduled to take effect on 4March, investors started to sell-off the greenback and flock into gold (XAUUSD)as well as into alternative safe-haven currencies, such as the Swiss franc(CHF) and the Japanese yen (JPY). In just three trading sessions (from 3–5March), DXY plunged by more than 3% while the gold price gained more than 2%.

●6 March. DonaldTrump signed an executive order establishing a U.S. cryptocurrency reserve.However, it was unclear how exactly this reserve would work and just how muchit would differ from Bitcoin holdings already in place. Many crypto enthusiastswere disappointed, which triggered a five-day downturn in BTCUSD, culminatingin Bitcoin briefly dipping below the crucial $80,000 level on 10 March.

●2 April. The trade war entered the nextstage when Trump unveiled his long-promised 'reciprocal' tariffs strategy,essentially imposing import duties on more than a hundred countries. The marketroute began with equity markets losing billions of dollars in valuation.S&P 500 lost more than 11% in just two days, while DXY dropped to a freshsix-month low.

●9–11 April. Trade war drama continued tounfold. Financial markets were stunned by President Trump's abrupt reversal ontariffs. Duties on trading partners, which had taken effect less than 24 hoursprior, were largely rolled back as the President announced a 90-day freeze onthe reciprocal tariffs. However, a 10% blanket tariff was still applied to mostnations. In contrast, the trade conflict with China escalated sharply.Following China's 84% retaliatory tariff on U.S. goods, the U.S. increasedtariffs on Chinese imports to 125%. This, combined with existing duties,brought the total U.S. tariff burden on Chinese imports to 145%. Kar Yong Ang,a financial market analyst at Octa broker, comments: 'I will remember that day for a longtime. Traders were stunned by Trump's sudden U-turn on trade policy and reallystruggled to make sense of it all. A knee-jerk reaction was to simply buy goldand ask questions later.'

Apart from country-based tariffs, Trump also introduced additionalimport tariffs on aluminium and steel and ordered a probe into duties on copperimports. Overall, his aggressive trade policies have fueled speculation aboutthe global recession, which explains why gold has been one of thebest-performing assets since Trump took office. Kar Yong Ang comments:

'We aredealing with a rather unusual situation. Even a global depression is not out ofthe question as tariffs may disrupt supply chains, hurting global output whilealso contributing to stronger inflationary pressure. This will certainlycomplicate monetary policy decisions. If I were to describe Trump's first 100days in just two words, it would be "runfor safety".'

Indeed, Trump's recent public criticism of Jerome Powell, the Fed'sChairman, added more fuel to the fire of nervous investor sentiment.

Overall, the full effect of Trump's policies is yet to materialise,but the potential impact on global trade and the macroeconomy is substantial.The IMF, citing escalating trade tensions, downgraded its 2025 global growthforecast to 2.8% and warned of potential stock market crashes and a 7%contraction in the world economy should trade wars persist. Although ScottBessent, the U.S. Treasury Secretary, hinted at de-escalating U.S.-China tradetensions, it is clear that investors should still get used to living in aperiod of heightened volatility and uncertainty.

Kar Yong Ang has this advice for an average retail trader: 'Focus moreon short-term trades with tight stop-losses as opposed to long-termposition-trading, cut exposure to U.S. equities, diversify into gold and othersafe-haven currencies like Swiss franc and most importantly, keep your mindclear and be ready to quickly switch from one position to another'.

Compliance reminder:trading Contracts for Difference (CFDs)carries a high level of risk and may not be suitable for all investors.Emotional trading can increase this risk. Always trade within your means andunderstand the risks involved.

About Octa

Octa is an international broker that hasbeen providing online trading services worldwide since 2011. It offerscommission-free access to financial markets and various services used byclients from 180 countries who have opened more than 52 million trading accounts.To help its clients reach their investment goals, Octa offers free educationalwebinars, articles, and analytical tools.

The company is involved in acomprehensive network of charitable and humanitarian initiatives, including theimprovement of educational infrastructure and short-notice relief projectssupporting local communities.

Since its foundation, Octa has wonmore than 100 awards, including the 'Most Reliable Broker Global 2024' awardfrom Global Forex Awards and the 'Best Mobile Trading Platform 2024' award fromGlobal Brand Magazine.