Stocks Surge as Trump's Inauguration Nears
Wall Street Prepares for Volatility
Stocks are poised for their best weekly performance since early November as investors anticipate Donald Trump's inauguration next week. The market's optimism stems from reassuring inflation data released this week, as well as the prospect of favorable policies from a Republican-controlled government.
Trump 'Trades' Advance
Cryptocurrencies, Trump Media & Technology Group (DJT), and Tesla (TSLA) have all experienced gains in anticipation of Trump's return to the White House. Trump's support for blockchain technology has buoyed crypto prices, with Bitcoin (BTCUSD) reaching its highest level in a month.
Wall Street Cautious
Despite the market's enthusiasm, some Wall Street analysts remain cautious. Trump's trade and immigration policies could exacerbate inflation and force the Federal Reserve to maintain elevated interest rates. Additionally, the Cboe Volatility Index (VIX) indicates that traders anticipate increased volatility next week as Trump issues a series of executive orders.
Retail Investors Hold Back
Retail investors have shown some hesitation leading up to Trump's inauguration. While they initially invested heavily in crypto stocks and DJT, buying activity has slowed down in recent weeks. Uncertainty surrounding inflation and interest rates may have contributed to their reluctance.