Trump's first day in office gets mixed reception from US stocks

Vital Energy

21/01/2025 16:21

By Medha Singh and Ananya Mariam Rajesh
       Jan 21 (Reuters) - Tesla, prison operators and other
notable "Trump trades" were volatile on Tuesday as investors
assessed a blitz of executive orders by President Donald Trump
within hours of taking the oath of office.
    Trump laid out sweeping plans to maximize oil production,
curb immigration and impose tariffs as he started his second
term as the U.S. president on Monday.
    Some "Trump trades", or bets on what the president will do,
rose on Tuesday while others tumbled as investors braced for
more volatility under Trump 2.0.  
    
    TRUMP MEDIA & TECHNOLOGY GROUP  
    Shares of Trump Media & Technology Group  DJT.O , parent of
the president's social media and streaming company Truth Social,
dropped 11.7% following a strong run-up to the inauguration day.
    Trump Media shares, widely favored by retail investors to
bet on Trump's presidency, are now facing competition from a
newly launched namesake "memecoin", whose value had soared to
more than $15 billion in just a day after launch.
    "When DJT originally went public, it was one of the only
ways to directly play Trump enthusiasm in the markets, but now,
especially with the release of $TRUMP and $MELANIA crypto, there
are multiple assets investors can put capital into," said
Michael Schulman, chief investment officer at Running Point
Capital.
    
    ELON MUSK-LED TESLA
    Shares of Tesla  TSLA.O  fell 2.8%, erasing its premarket
gains. The stock has surged 70% since the Nov. 5 presidential
election as investors pinned their hopes on CEO Elon Musk's
growing ties with Trump and his role in the new administration
to help the automaker.
    Musk, who cheered Trump's return to the White House in a
speech during the president's inauguration on Monday, will lead
the Department of Government Efficiency, a panel tasked with
finding ways to cut government spending. 
        
    ENERGY FIRMS
    "We will drill baby, drill," Trump said on Monday as he laid
out a plan to maximize U.S. oil and gas production by declaring
a national energy emergency, stripping away excess regulation
and withdrawing the U.S. from an international pact to fight
climate change. 
    Shares of some major oil firms and top oilfield services
companies rose, with Schlumberger  SLB.N  up 1.7% and Kinder
Morgan  KMI.N  2.2%.
    
    NUCLEAR STOCKS
    Nuclear energy stocks rose as investors cheered Trump's pick
of Chris Wright for energy secretary. Wright has promised to
prioritize the production of nuclear power and liquefied natural
gas as part of his plan to boost U.S. energy output.
    Vistra  VST.N  gained 4%, NuScale Power  SMR.N  rose 10%,
while Sam Altman-backed nuclear startup Oklo Inc  OKLO.N  added
12.4%.    
    
    PRISON OPERATORS
    Shares of immigration detention center operators GEO Group
 GEO.N  and CoreCivic  CXW.N  slipped less than 1%, reversing
their premarket gains. The stocks posted double-digit gains last
year on expectations that Trump's crackdown on illegal
immigration would bring more business. 
    Trump declared a national emergency at the U.S.-Mexico
border and targeting automatic citizenship for U.S.-born
children of immigrants in the country illegally.    
    
    U.S.-LISTED CHINA STOCKS
    American depositary shares of Chinese companies got a boost
as Trump held off on imposing heavy tariffs on the world's
second-largest economy in an unexpected move after threatening
60% levies on Chinese goods during his campaigns.
    Shares of Alibaba Group Holding  BABA.N  gained 0.6%, while
the broader iShares MSCI China ETF  MCHI.O  added 0.4%.    
    
    CRYPTO STOCKS
        Shares of cryptocurrency and blockchain-related
companies slipped as bitcoin's rally 
    cooled
     after hitting a record high of $109,071. Trump's first set
of policies made no reference to the asset class.
  
        Crypto exchange Coinbase Global  COIN.O  shed 3.6%,
while Marathon Digital  MARA.O  and MicroStrategy  MSTR.O 
dropped 1.7% and 3.9%, respectively.
  

 (Reporting by Medha Singh and Ananya Mariam Rajesh in
Bengaluru; additional reporting by Sukriti Gupta; Editing by
Anil D'Silva)
 ((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly
Twitter: @medhasinghs;))