Wall Street Eyes Trump’s Crypto Push as Futures Gain Ahead of Inauguration

The stock market experienced a strong rally last week, with the Nasdaq and S&P 500 indices moving back above their 50-day moving averages.

Stock futures were muted Monday evening as markets remained closed for Martin Luther King Jr. Day, coinciding with Donald Trump’s inauguration, where he's expected to issue numerous executive orders.

Futures edged up on Monday evening, with the Dow futures up slightly compared to fair value. S&P 500 futures climbed 0.1%, and Nasdaq 100 futures advanced by 0.2%.

Bitcoin futures also rose, with the cryptocurrency reaching over $108,000, even hitting above $109,000 overnight.

Markets experienced a strong rally last week, with the Nasdaq and S&P 500 indices moving back above their 50-day moving averages. Treasury yields fell following tame inflation data, and positive earnings reports helped buoy the major indexes.

Bitcoin surged to near record highs due to expectations of pro-crypto policies from Trump. Stocks such as Tesla (TSLA), ServiceNow (NOW), Vertiv (VRT), Amazon.com (AMZN), and Broadcom (AVGO) displayed buy signals. Other actionable stocks included Goldman Sachs (GS), Energy Transfer (ET), Viking Cruises (VIK), and Quanta Services (PWR).

Trump also launched his own cryptocurrency, the $TRUMP meme coin, on Friday, which saw a rapid increase in value, with Trump businesses controlling around 80% of it. Melania Trump also introduced her own meme coin, $MELANIA.

TikTok also resumed operations after adhering to a U.S. law that banned it starting Sunday. Trump announced plans to issue an executive order granting the Chinese-owned app a temporary reprieve.

U.S. stock and bond markets were closed Monday, so investors may not receive a clear initial reaction to Trump’s actions until Tuesday. Global stock markets are open today.

Trump will be inaugurated on Monday and is anticipated to immediately issue between 100 to 200 executive orders covering topics such as energy policies, deportations, Bitcoin, and TikTok.

These executive orders could significantly impact Wall Street and specific sectors, although markets may have already factored some changes in. On Friday, Trump reported a “very good” call with Chinese President Xi Jinping regarding trade and TikTok, which may ease fears related to the trade war as Trump resumes his presidency.

The stock market displayed strong performance last week, with the Dow Jones Industrial Average rising 3.7% and briefly surpassing its 50-day moving average. The S&P 500 increased by 2.9%, and the Nasdaq composite rose 2.45%, both exceeding their 50-day lines. The small-cap Russell 2000 climbed approximately 4% but remains below the 50-day line.

Growth ETFs also saw notable recovery, with the Innovator IBD 50 ETF (FFTY) rising 3.6%, and the iShares Expanded Tech-Software Sector ETF (IGV) increasing by 3.2%. The VanEck Vectors Semiconductor ETF (SMH) rallied 4.5%. The SPDR S&P Homebuilders ETF (XHB) saw significant gains, surging 8.1% for the week.

Bitcoin was trading at 104,767.70 on Friday, nearly reaching $106,000. The surge in Bitcoin and other cryptocurrencies was linked to reports surrounding a pro-crypto executive order from Trump to establish a crypto advisory council, supported by a sentiment of rising Treasury yields.

Notably, Tesla stock surged 8.05%, closing at 426.50 for the week and rebounding from its 10-week line. Tesla’s upcoming earnings report on January 29 could attract significant attention, particularly regarding Elon Musk’s plans for self-driving technology and the company’s forthcoming “affordable” EV model.

If markets respond positively to Trump’s executive orders, the upcoming days are expected to show increased activity on Wall Street.