Market watch: 24th January 2025

President Trump remains centre stage. It has been an exciting week, politically speaking, from executive orders to various announcements, financial markets have had a lot to keep up with. The Stargate project was one such announcement, an ambitious plan to invest $500 billion over the next four years into cutting edge AI infrastructure. The announcement was welcomed with open arms by US stocks, culminating in the S&P 500 reaching a record high yesterday. The Dow and Nasdaq are not far behind either, the latter now only a hair’s breadth from its previous all-time high.

Yesterday, during a remote address to the World Economic Forum in Davos, President Trump called for Saudi Arabia and the wider OPEC cartel to lower oil prices, claiming artificially high crude valuations were fuelling war efforts in Ukraine. Crude prices have taken a sizeable step down since the yearly highs last week. Brent is now hovering around $77 a barrel and WTI is down to $74. Oil markets are likely to remain pertinent during the next few years, as sanctions and tariffs levelled against oil-producing nations will continue to affect supply and demand dynamics. Not to mention the possibility of the US ramping up its own production domestically.

During the same speech, Trump also demanded that interest rates be slashed immediately. Just how much sway the president has with the Federal Reserve is a never-ending topic of debate, but the odds of a rate cut next week have not budged, remaining at essentially zero for any kind of reduction. On the topic of interest rates, the Bank of Japan elected to hike rates on the Yen by 25 bps to 0.5% this morning, the highest rate the Yen has seen since 2008. Not much of a reaction in USDJPY so far; the call appears to have been universally expected.

The bullish momentum seen in gold markets this week continued this morning. The precious metal rose to $2,777 early on in the Asian session, bringing it to within touching distance of the record high established in October last year.