The first month of 2025 confirmed the importance of politics and global macroeconomic dynamics in influencing financial markets. Donald Trump’s inauguration at the White House, the return of the tariff war, and uncertainties regarding monetary policies contributed to a start of the year characterized by strong market fluctuations.

Trump’s return and market reactions

The election of Donald Trump as the 47th President of the United States immediately triggered reactions in global markets. The administration’s statements regarding the introduction of new tariffs on China, Canada, and Mexico raised concerns about inflation and potential repercussions on economic growth. The “Make America Great Again” program focuses on protectionism and immigration restrictions, factors that could increase labor costs and the prices of imported goods.

These uncertainties fueled volatility in stock markets. The S&P 500 initially benefited from positive expectations on corporate earnings, with growth in the technology and healthcare sectors, but the uncertain trajectory of the Federal Reserve’s monetary policy led to phases of correction. In Europe, the Euro Stoxx 50 showed resilience due to more stable inflation, but economic growth remains fragile.

Central Banks: between inflation and rate cuts

Major central banks began 2025 with decisions in line with expectations. The Federal Reserve kept interest rates unchanged between 4.25% and 4.50%, while the European Central Bank opted for a 25 basis point cut to support Eurozone growth. However, in the United States, the reduction in inflation stalled, while the labor market remains strong, creating further doubts about the future direction of monetary policy.

In the bond market, U.S. Treasury yields fluctuated based on expectations about the Fed. In Europe, German Bunds remained relatively stable, while the euro weakened against the dollar due to economic uncertainties in the Eurozone.

The AI boom and its market impact

One of the most significant events in January was the challenge launched by the Chinese startup DeepSeek AI, which introduced an advanced model capable of competing with American tech giants. The announcement shook the market, leading to a 17% drop in Nvidia’s stock in a single day and raises concerns about the high spending of big tech companies in the AI sector. Meanwhile, the “Stargate” project by SoftBank, OpenAI, and Oracle, with a planned USD 100 billion investment, aims to strengthen American dominance in artificial intelligence.

Outlook for the coming months

Looking ahead, several factors could determine market trends in the coming months:

  • U.S. trade policy: The escalation of the tariff war could impact global supply chains and fuel new inflationary tensions.
  • Monetary policies: The divergence between the Fed and the ECB will continue to influence bond and currency markets.
  • Technological sector evolution: The competition between Chinese and American AI firms could redefine the balance in the tech sector.
  • European political scenario: Early elections in Germany and instability in France add further uncertainties.

Thus, 2025 begins with a complex landscape in which investors must navigate between volatility and new opportunities, keeping a close eye on global geopolitical and economic dynamics.