Trading results for 21 January 2025
The first trading day after the inauguration of the new US president, Donald Trump, was accompanied by a flurry of executive orders that, as expected, caught the market participants off guard. Fortunately, these orders turned out to be less severe than some had feared and caused no immediate casualties. In fact, this was the main driver of Tuesday's market rally. Although the main trading session began near zero levels, there was a noticeable positive sentiment that only grew stronger throughout the day. Trump, like an experienced stoker, kept fuelling the market with new "logs" (executive orders), which investors largely interpreted positively.
As a result, the trading session saw a confident upward trend, culminating in all indexes closing at their daily highs. Among the leading US indexes, the Dow Jones (DJIA-30) posted the largest gain, up 1.24%. Its peers, the broad-market S&P 500 and the tech-heavy NASDAQ Composite, also rose, albeit less dramatically, gaining 0.88% and 0.64%, respectively.
Meanwhile, the ITS indexes supported the Dow and accomplished what the leading US indexes could not—posting gains exceeding 1% in a single day. The ITS World Index (ITSW) and the ITS Shariah Index (ITSS) both climbed 1.16% on Tuesday. The main driver of growth in these indexes was the stock of the tech giant Oracle Corp (ORCL, +7.17%), which surged after President Trump issued an order lifting the ban on TikTok, making it available to everyday Americans once again. Oracle, as the primary cloud provider for TikTok in the US, benefited significantly, while companies like Apple (AAPL, -3.19%) adopted a more cautious approach.
While the iPhone maker continues to block TikTok downloads on its App Store, Oracle placed its trust in Trump’s assurances, enabling millions of US users to regain access to a continuous stream of data across 40 applications. Oracle’s stock skyrocketed, gaining over 7% in a single day, while Apple shares found themselves on the opposite end of the spectrum. On Tuesday, Apple was the biggest loser in both the S&P 500 and the ITS family of indexes: ITSW and ITSS.
The sell-off in Apple shares was driven not only by the absence of TikTok in its App Store but also by negative forecasts from leading analysts at Jefferies and Loop Capital. Analysts from both firms revised their sales estimates and lowered their target prices for Apple shares. Jefferies analyst Edison Lee reduced his target from $212 to $201 per share, while Loop Capital predicted a 2% decline in iPhone sales, revising its previous forecast of a 1% increase. Naturally, these predictions dampened the mood of investors and Apple enthusiasts, leading to a modest sell-off in the company's stock on Tuesday.
Overall, Tuesday’s trading results can be considered positive. The initial reaction to the largely unpredictable Trump presidency did not result in any "catastrophes," which is already a good sign. Market participants remain relatively confident, and there is every chance that we may see the continuation of the upward trend and new record highs for the indexes in the coming days.