After President Trump's reelection, the markets reacted predictably to expected policy changes. The US dollar gained strength, driven by anticipated higher tariffs, while Treasury yields increased due to the likelihood of a growing deficit from tax cuts. US stocks also surged, especially in sectors poised to benefit from deregulation and tax incentives. However, there is still uncertainty surrounding how tariffs will be implemented—whether broadly or selectively—and the timing and extent of the deficit increase from tax cuts. These factors will play a crucial role in shaping future market trends, with the risk of higher inflation and slower growth if tariffs are applied widely and significant fiscal expansion takes place.
