By Suzanne McGee and Saeed Azhar

NEW YORK (Reuters) – Investors welcomed Donald Trump’s second inauguration on Monday, saying it heralded a pro-business agenda and that they were relieved that protectionist trade policies could be implemented. which is more methodical than many fear.

Trump entered office with an ambitious agenda that included trade reform, immigration, tax cuts and deregulation that had the potential to boost US corporate profits but could also change inflation, pressure of stocks and bonds and forcing the Federal Reserve to raise borrowing rates.

In his inaugural address on Monday, Trump pledged to strengthen the US oil, gas and electricity industries, to crack down on immigration and reiterated his intention to collect “huge amounts” of tariffs. Investors, who are adjusting portfolios across asset classes, said they remain cautious, waiting for signs of how the initiatives will be implemented.

“A lot of what he’s talking about will help improve corporate growth and earnings,” said Jack Ablin, chief investment officer at Cresset Capital.

“But a lot comes at a cost. We need to see a lot of income growth to make even a small increase in interest rates that could follow higher tariffs” and other proposals, he said. .

Despite talking about his planned tariffs, Trump stopped short of taking aggressive tariff action in his first hours in office, which has become a key concern for many investors, sparking a relief rally globally. stocks, while other major currencies rallied against the dollar. Instead, Trump will release a wide-ranging trade memo on Monday ordering federal agencies to review US trade relations with China, Canada and Mexico.

“The biggest reaction is the visible delay in tariffs. Of all the proposals put forward, that is the one that is likely to affect the market,” said Rick Meckler, a partner at Cherry Lane Investments in New Jersey.

“When you say you’re going to study and try to negotiate it after you said you’re going to do it on Day One, I think that’s encouraging for the market.”

Stock futures traded higher after the inauguration, with index contracts up around 0.4% late in the day, while the dollar fell and the peso gained slightly. US exchanges are closed for trading in honor of the Martin Luther King Jr. holiday.

During his election campaign, Trump promised to impose high tariffs of 10% to 20% on global US imports and 60% on goods from China, but investors say the signs on Monday so the new administration will take a more measured approach.

“It is too soon to declare that the worst threat of tariffs has passed. But in fact, Day One is better for international trade than many feared,” Chris Turner, global head of markets at ING, wrote a note.

DEREGULATION PROMISE

Elsewhere in the market, Trump’s promise to ease regulation lifted bank stocks and sent cryptocurrencies soaring.

As they reported rising earnings, Wall Street CEOs told investors this month that the incoming US administration will be business-friendly and good for banks.

The cryptocurrency industry hopes Trump will fulfill his “crypto president” campaign promises by creating a federal bitcoin stockpile, giving crypto companies access to banking services, and creating a crypto council, it has been reported. to Reuters then.

Trump also launched a branded cryptocurrency that rose on Monday to more than $8 billion in market value, raising ethical questions.

After Trump’s Monday speech, the price of bitcoin remained below the overnight high of $107,000, at around $104,000, as the market anxiously awaited specific cryptocurrency announcements.

During the first year of Trump’s first administration, the S&P 500 rose 19.4%, after a 5% rally in his first 100 days in the Oval Office. During the entirety of Trump’s first term, the S&P 500 has risen nearly 68%, but markets have seen bursts of volatility, stemming from a trade war Trump is waging with China.

After Trump’s last inaugural address, in January 2017, the S&P 500 ended up 0.3% for the day. Due to the holiday, the trading reaction at this time will not be visible until Tuesday.

Some investors said they are still in wait-and-see mode.

“The big question on investors’ minds right now is ‘how’ — how he’s going to cut costs and lower inflation and lower interest rates,” said Josh Strange, president of Good Life Financial Advisors in NoVA, a financial advisory company. .