Trump returns to the White House next week. How do investors prepare?

Markets were buoyant on Friday, the last trading day before Donald Trump’s inauguration on Monday, but there were some signs of tension on Wall Street.

The stocks were on the right track They will have their best week since early November when the election results come out It sent stocks soaringWhile Bitcoin jumped to its highest level in a month.

The Republican triumvirate in Washington — control of both chambers of Congress and the White House — that will arrive on Monday is expected to usher in a slew of deregulation, tax breaks, and other business-friendly policies.

Trump’s pledges to support blockchain technology – and his personal and business ties to the cryptocurrency industry – have pushed up cryptocurrency prices since his re-election. Bitcoin price (Bitcoin against the dollar) above $105,000 on Friday, while lesser-known coins also rose.

Other “Trump deals” were also advancing on Friday. Shares of Trump Media and Technology Group (DJT), which can be considered an indicator of the president-elect’s popularity, increased by about 2%, and it… I won more than 20% Since the beginning of the year. Tesla shares (TSLA), whose CEO Elon Musk has become one of Trump’s closest advisers, shares rose 6% on Friday, taking its post-election gains to 75%.

Some investors are wary of Trump 2.0

Investor enthusiasm for Trump 2.0 is not clear. Wall Street has been facing months of uncertainty about how Trump’s trade and immigration policies will affect inflation. Economists generally agree that the tariff and deportation plans have been implemented as threatened Inflation worsened And force the Federal Reserve to do so Keep interest rates high.

Trump’s advisers eased some market concerns by suggesting he would accept A more measured approach As his campaign rhetoric suggests.

However, markets could be volatile next week as Trump issues a torrent of executive orders. the Cboe Volatility IndexThe VIX index, or VIX, was around 16 on Friday after falling steadily this week as Wall Street cheered reassuring inflation data. But according to data from brokerage firm Charles Schwab, VIX options volume was above average on Thursday, and the most heavily traded contract — the VIX at 18, expiring on January 22 — could imply that traders expect a rebound in volatility next week.

Retail investors also showed some caution heading into the first week of Trump 2.0. Individual investors piled into cryptocurrency and DJT stocks in the weeks after Trump’s win, but buying has been quiet in the past few weeks, according to Vanda Research data that runs through Jan. 14. Uncertainty about the future of inflation and interest rates has certainly loomed over stocks since the start of the year, and retail traders may have been waiting until after this week’s inflation data to rush into stocks.