Stock market index stays close to all-time high as investors keep watch on policies of President Trump

London’s FTSE 100 is experiencing a surge as investors eagerly anticipate Donald Trump’s return to the White House, bringing potential impacts on tariffs and international relations. The top British firms on the FTSE 100 index are trading near all-time highs, with a modest 0.2% increase just below its record peak from the previous session. This rise comes amidst thin trading volumes due to a U.S. holiday.

Trump, set to be sworn in as the U.S. President at 1700 GMT, has made promises to enact various executive orders related to immigration, energy, and tariffs, causing concerns among traders. The potential implementation of tariffs on countries such as China could lead to increased inflation and potentially negatively impact global economic growth.

In addition to Trump’s actions, market participants are closely following the annual assembly of government and business leaders in Davos, as well as upcoming earnings reports. Recent data pointing to declining inflation rates in the U.S. and the UK has encouraged traders to speculate on further rate cuts by the Federal Reserve and the Bank of England.

Current market expectations suggest an 81% likelihood of a 25 basis points rate cut by the BoE in the coming month, with a total anticipated easing of 62 bps by the end of 2025. Despite this positive outlook, the FTSE 250 midcap index experienced a slight dip of 0.5% following a four-day streak of gains.

Among individual stocks, Reach Plc saw a significant surge of 26%, marking its most successful day in over 14 years. The publishing company, known for the Daily Mirror, expects its fiscal 2024 operating profit to exceed market projections, boosted by a strong performance in the fourth quarter. On the other hand, Entain faced a 1.5% decline as Britain’s accounting watchdog initiated an investigation into KPMG’s audit of the bookmaker’s financials for the year ended December 2022.

Another notable mover was the Electric Vehicle charging point provider, Pod Point Group, which witnessed a substantial 40% drop after issuing a warning regarding a challenging year and revising its 2024 revenue forecast downwards due to weaker EV demand.

As global markets navigate through various geopolitical and economic developments, investors remain vigilant for any updates and policy decisions that could impact the trajectory of the financial landscape. Despite uncertainties and potential challenges, the resilience of the markets continues to be tested as participants adapt to changing conditions and adjust their strategies accordingly.