Trump’s Busy Start to Life as President Offers Insights on a Mixed Future for Global Tech Stocks

As Donald Trump’s second term in the White House gets underway, we’re already gaining some invaluable insights into how the coming four years are set to impact global financial markets. With the tech sector set to see significant changes in the US and beyond, the early signs are that the returning President is prioritizing growth.

Crucially, Trump opted to hold off from imposing the tariffs he threatened on China, Canada, and Mexico throughout the campaign trail. Despite threatening to add the tariffs on ‘day one’ of his return to office, Trump took a more measured approach in a move that helped to form a widespread relief rally both domestically and internationally.

Instead, the President held off on imposing tariffs on Chinese exports as part of his campaign promise, claiming that China would face significant tariffs if Beijing failed to approve a TikTok deal following a 75-day delay to the app’s ban in the United States.

Trump’s decision to maintain the use of tariffs as a bargaining chip as opposed to a fixture throughout his second term saw US stock futures rise while the dollar fell from a near two-year high in the wake of the President’s inauguration on January, 20.

However, sentiment turned again when the President claimed that he was looking at imposing the promised 25% duties for Canada and Mexico starting on February 1, 2025. As a result, China’s brightening stock market outlook retraced somewhat as investors became less convinced that Trump’s softer stance would continue to play out in the long term.

We can use Trump’s strategy on tariffs as an indicator that the President will prioritize growth ahead of his long-term skepticism over the United States’ relationships with China, Canada, and Mexico, and although it’s only early days, it’s reasonable to expect that tech stocks will reap the rewards of this pro-growth mindset.

Tech Growth at All Costs

We’re in the midst of an artificial intelligence boom, and one of Donald Trump’s first acts upon re-entering the White House was to roll back former President Joe Biden’s executive order surrounding the use of artificial intelligence.

The order, which focused on introducing oversight measures that claim to protect Americans from the dangers of autonomous systems, particularly in health and national security, was labeled ‘dangerous’ by Republicans, and the requirement for developers to share details about potentially risky AI models was a leading source of controversy.

In moving to roll back the order, Trump has immediately granted more freedom to tech firms to continue their development of AI models and offers a snapshot of the new government’s approach to driving growth in a deregulation environment.

Given that the S&P 500 has roughly 8% of its value tied to AI product lines, and with all of the Magnificent Seven stocks dabbling in AI to a significant extent, the economic health of the US will rely heavily on tech stock outperformance.

Although Trump has been inconsistent with his views of the potential of AI, his appointment of Tesla CEO, Elon Musk, will likely see the tech mogul’s influence on the sector. Although both Trump and Musk have been outspoken about the existential dangers of AI, we’re certain to see a more conducive environment for leading tech players to embrace artificial intelligence for growth.

Stocks like Meta, Alphabet, and Amazon all grew in the hours following Trump’s inauguration while the billionaire top executives were prominently seated at the ceremony. The positioning of Magnificent Seven executives like Mark Zuckerberg, Jeff Bezos, and Elon Musk would have been knowingly choreographed to demonstrate the financial prowess of the United States and Trump’s overwhelming support among the nation’s most powerful individuals.

Tesla has been the biggest winner of Trump’s election victory so far. With a share price of $251 on November 5, 2024, TSLA has since increased to $426 at the close of markets on January 17, 2025. This leap is a significant 69% share price increase in less than three months, and factors in the expected influence that CEO Elon Musk will have as the newly appointed head of the US Department of Government Efficiency.

Cautious Optimism in Asian Tech

Trump’s softer stance on Chinese tariffs saw stocks in Asia move upwards, albeit cautiously. Hong Kong’s Hang Seng Tech Index climbed 2.1%, while the broader Hang Seng Index saw a jump of 0.9%.

Notably, the prospect of no immediate trading tariffs prompted semiconductor and electronics stocks like smartphone lenses and camera manufacturer Sunny Optical and Chinese chip maker SMIC to grow 7.3% and 6.3% respectively.

Electronic vehicle stocks like XPeng and Li Auto also rallied more than 5% respectively, with BYD recording a small gain of 1.7%.

Despite an ambitious inauguration speech, China wasn’t targeted specifically by Trump, pointing to the prospect that the two nations may yet be capable of forming a conducive trading relationship that could boost tech stock performance globally.

However, Trump’s unpredictability means that investors will likely look to the global news cycle increasingly as an opportunity to make pre-emptive decisions with higher yield potential by deciphering the President’s intentions and their global impact.

As a result, we’re likely to see more institutions increase their appetite for global market data solutions from prime service providers to move quickly when navigating Trump’s far-reaching global impact over the coming four years.

The Age of Volatility

The second Trump Presidency has had the action-packed start that many globally-focused investors had anticipated. His unconventional, deregulation-focused leadership strategy means that we can expect tech stocks to be directly affected by many decisions over Trump’s second term.

While markets clearly anticipate more growth on the horizon, we’re set to see increased volatility in the President’s decision-making process that could see global tech stocks shift more aggressively than we’re used to.

For institutional investors, this volatility will provide plenty of risks and opportunities. The bigger challenge ahead may lie in navigating these increasingly unpredictable waters before the wider market has a chance to react.