European stocks might experience uncertainty at the opening on Monday as the new era of Donald Trump's presidency begins. The U.S. markets will see reduced activity due to the Martin Luther King Jr. Day holiday.
Donald Trump is set to begin his second presidential term with an inauguration ceremony at the U.S. Capitol today. Reports suggest he will enact over 200 executive actions, focusing on issues such as border security and energy production.
Key early administration actions on tariffs could significantly influence the global economy and financial markets. Speculation surrounds how Trump's proposed tariffs on imports from major trading partners, Canada, Mexico, and China, may impact the U.S. economy, consumer prices, and employment.
In Asia, markets presented mixed results, with the U.S. dollar remaining stable following a constructive call between Trump and Chinese President Xi Jinping, discussing topics like TikTok, trade, and Taiwan.
Meanwhile, the Chinese yuan appreciated slightly as China maintained its benchmark lending rates for the third month in a row. The Japanese yen saw interest from investors expecting the Bank of Japan to hike interest rates on Friday.
Gold prices edged higher, surpassing $2,700 per ounce, while oil prices showed mixed trends.
In the U.S., stock markets saw significant increases on Friday, marking weekly gains for the first time in three weeks. This uptick was driven by optimism about economic conditions and anticipated interest rate paths. December's industrial production exceeded expectations, and U.S. single-family homebuilding reached a 10-month peak, according to separate reports.
The Nasdaq Composite rose by 1.5%, the S&P 500 climbed 1%, and the Dow increased by 0.8%, achieving their largest weekly gains since the November presidential election.
In Europe, stocks ended higher on Friday, buoyed by positive sentiment regarding potential interest rate reductions following dovish remarks from Federal Reserve Governor Christopher Waller and ECB Governing Council member Yannis Stournaras. The pan-European STOXX 600 index increased by 0.7%, marking its fourth consecutive weekly gain.
The U.K.'s FTSE 100 rose by 1.4%, reaching a record closing high, while Germany's DAX and France's CAC 40 advanced by 1.2% and 1%, respectively.
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