After Trump's inauguration speech, the &#34;Trump trade&#34; faces a new round of tests.On January 20 local time, Trump officially took the oath of office as the 47th President of the United States. Due to the lack of specific details on tariffs in his inauguration speech, the Bloomberg Dollar Spot Index recorded its largest single-day decline in 14 months. However, Trump subsequently signed an executive order announcing tariffs on Canada and Mexico, causing the dollar to rise.Analysts believe that the U.S. stock market may also experience a pullback due to disappointment in the short term, and historically, the U.S. stock market tends to show a downward trend in the months following a presidential inauguration.<h2>The Sliding Dollar</h2>In the past, the dollar often saw slight increases between presidential elections and inaugurations, followed by a period of consolidation. This time, however, the dollar surged significantly after Trump's victory, driven by higher yields, tariff expectations, and &#34;America First&#34; policies, pushing the dollar index to a two-year high. Yet, the dollar index quickly fell after Trump's inauguration ceremony.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7cef00d2-34c7-45db-a4d8-dbf11e258e0a.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7cef00d2-34c7-45db-a4d8-dbf11e258e0a.png"/>On January 20 local time, Trump stated in his inauguration speech, &#34;We will impose tariffs and taxes on foreign countries to make our citizens wealthy,&#34; but he did not disclose more details of the plan. According to media reports, Trump administration officials indicated earlier on Monday that the president intends to assess trade relations with other countries but hinted that new tariffs would not be imposed quickly.With the absence of specific tariff measures on Trump's first day in office, the dollar plummeted, with the Bloomberg Dollar Spot Index falling 1.1% on Monday, marking its largest single-day decline in 14 months.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/fbe2a0b4-019c-4dfc-aa32-2b0f42bd06fe.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/fbe2a0b4-019c-4dfc-aa32-2b0f42bd06fe.png"/>Analysts pointed out that the dollar's vulnerability is exacerbated by the overly concentrated long positions of speculators—over the past month, net long positions in the dollar have increased significantly, and currently, speculators' net long positions in the dollar relative to developed and emerging market currencies are at an eight-year high—thus, facing a risk of correction is not surprising.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/46d0edee-f842-4480-8455-bbe5fa222ffd.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/46d0edee-f842-4480-8455-bbe5fa222ffd.png"/>However, it should be noted that on the evening of the inauguration ceremony, according to CCTV News, Trump signed an executive order, announcing a 25% tariff on goods imported from Canada and Mexico starting February 1. Following the news, the dollar surged briefly, while the Mexican peso and Canadian dollar fell in response, and the yen against the dollar once again fell below the 156 mark.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/085b3ae0-be94-48b3-8082-dd513e02f265.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/085b3ae0-be94-48b3-8082-dd513e02f265.png"/><h2>Will the U.S. stock market correct?</h2>In Trump's inaugural speech, social issues such as immigration, borders, crime, and justice were prioritized; economic issues, inflation, and energy also held significant importance; trade, tariffs, and foreign policy issues were mentioned later.Therefore, Bloomberg macro strategist Simon White believes that the U.S. stock market may experience a correction in the short term due to disappointment.White also added that historically, during presidential transitions, the volatility of the U.S. stock market tends to be higher, but ultimately it will surpass previous average performance—however, the U.S. stock market usually experiences a downward trend in the months following the presidential inauguration. In an environment of extreme optimism, high positions, and inflated valuations, the stock market is more susceptible to shocks than before.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/85f8fc6d-dcdf-4456-878f-8cb553e8a7b4.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/85f8fc6d-dcdf-4456-878f-8cb553e8a7b4.png"/>Goldman Sachs derivatives trader John Marshall also pointed out that the U.S. stock market may experience significant volatility when it reopens after Trump's inauguration.Specifically, Goldman Sachs believes that companies facing tariff risks mainly belong to the retail sector, which has outperformed the market since the election due to heightened animal spirits following Trump's victory. However, Goldman Sachs believes that if tariffs are implemented, the trend is expected to reverse.Goldman Sachs also noted that 1. Companies most vulnerable to labor shocks (such as self-operated chain restaurants, food retailers, accommodation, construction, etc.); 2. Companies with a high proportion of labor costs relative to revenue; 3. Companies with employee compensation below the industry average are most likely to face challenges when labor supply decreases.Currently, these labor pressure risk companies are performing poorly in the U.S. stock market.In addition, Goldman Sachs expects health or food additive-related companies to be significantly affected:<blockquote><ol><li>Processed/packaged food and beverage companies may face increased raw material costs due to stricter standards for additives and certain chemicals/fertilizers;</li><li>Restaurant companies may be required to make significant changes to their menus while facing higher raw material costs, which may not be fully passed on to end consumers;</li><li>Vaccine-related companies may see a decline in vaccination rates and a reduction in pharmaceutical companies' advertising budgets if school vaccination becomes non-mandatory.</li></ol></blockquote>Currently, these health or food additive-related companies are also not performing well in the U.S. stock market

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Analysis suggests that the U.S. stock market may experience a pullback in the short term due to disappointment, and historically, the U.S. stock market tends to show a downward trend in the months following the presidential inauguration

- On January 20, Trump was inaugurated as the 47th president, leading to a significant drop in the Bloomberg Dollar Spot Index due to the lack of specific tariff details in his speech.  
- Following his inauguration, Trump signed an executive order imposing tariffs on imports from Canada and Mexico, which caused a brief recovery in the dollar.  
- Analysts predict potential short-term declines in the U.S. stock market due to disappointment, with historical trends indicating volatility and downward pressure in the months following a presidential inauguration.

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The "Trump Trade" welcomes the moment of verification: the US dollar has knelt first, what about the US stock market?