The first trading day of the Trump administration shifted market focus from tariffs to artificial intelligence, sparking a broad rally in equities and a sharp drop in the US dollar.

⚡ Closing Bell:

• Dow Jones: ⬆️ +1.2% › 44,025.8—boosted by a strong performance from 3M and Prologis.

• S&P 500: ⬆️ +0.9% › Industrials led the charge.

• Nasdaq 100: ⬆️ +0.6% › Gains fueled by tech leaders.

• Russell 2000: ⬆️ +1.9% › Small caps outperformed.

• Energy: The only declining sector.

Sector Moves:
✅ Industrials: Leading the pack with solid earnings from sector heavyweights.
❌ Energy: The day’s laggard as oil prices tumbled.

What’s Driving This?
While Trump mentioned tariffs in his inaugural address, markets are viewing the rhetoric as a negotiating tactic rather than imminent policy. Even the explicit threat of 25% tariffs on Canada and Mexico by February 1 is being heavily discounted, with betting markets favoring smaller, symbolic trade measures.

Our Take:
The optimism might feel like complacency, but investors have reasons to believe Trump’s strategy is aimed at securing leverage rather than delivering immediate shocks to trade. Still, with a history of abrupt shifts, markets should keep their guard up.

❗ What’s Next? All eyes are on upcoming earnings season and additional policy announcements from the White House.

#TRUTH:
❗❗❗ “It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe.” ~ Muhammad Ali

Highlights of the Day:

① AI stole the show after reports of a new joint venture, “Stargate,” focused on US AI infrastructure. Key beneficiaries included:

• Oracle (ORCL): ⬆️ +7.2% › A major player in the Stargate initiative.

• SoftBank (SFTBY): ⬆️ +3.7%

• Nvidia (NVDA): ⬆️ +2.3% › Riding AI optimism.

② Trump’s pledge to “put the American flag on Mars” ✅ ignited space stocks:

• Rocket Lab (RKLB): ⬆️ +30.3%

• Redwire (RDW): ⬆️ +51.4%

• Intuitive Machines (LUNR): ⬆️ +23.9%

③ Biotech saw action too, with Moderna (MRNA): ⬆️ +5.4% after securing a $500M+ grant for bird flu vaccine development.

④ On the Downside: Not every stock joined the rally…

• Trump Media (DJT): ⬇️ -11.1% › Fell despite political spotlight.

• Apple (AAPL): ⬇️ -3.2% › Downgraded due to soft China demand.

• Walgreens (WBA): ⬇️ -9.2% › Continued fallout from DOJ lawsuit.

⑤ EV stocks struggled amid unfavorable directives:

• Tesla (TSLA): ⬇️ -0.6%

• Rivian (RIVN): ⬇️ -6.5%

• ChargePoint (CHPT): ⬇️ -3.2%

❗Meanwhile, legacy automakers thrived, with GM (GM): ⬆️ +5.7% following an upgrade from Deutsche Bank.

⑥ Corporate Highlights:

• 3M (MMM): ⬆️ +4.2% › Strong Q4 results and upbeat 2025 guidance.

• Prologis (PLD): ⬆️ +7.1% › Earnings beat expectations, lifting the stock.

• Walgreens (WBA): ⬇️ -9.2% › DOJ lawsuit over opioid dispensing.
  

White House ❤️ Silicon Valley:

President Trump announced a $500 billion private-sector AI initiative on Tuesday, teaming up with tech heavyweights Oracle, OpenAI, and SoftBank. Dubbed Stargate, the project aims to supercharge US artificial intelligence infrastructure, starting with a massive data center project in Texas.

⚡ The Big Numbers:

• Initial Investment: $100 billion › Expected to scale to $500 billion over time.

• Jobs: 100,000+ American jobs projected “almost immediately,” per Trump.

Oracle (ORCL: +7.17%) shares surged on the news, climbing another +3% after hours, as investors cheered the company’s central role.

Who’s Involved?

• Masayoshi Son (SoftBank CEO)

• Sam Altman (OpenAI CEO)

• Larry Ellison (Oracle CEO)

These leaders joined Trump at the White House, signaling a bold shift in AI policy. The announcement follows Trump’s Monday repeal of Biden-era AI safety regulations, which had required companies to disclose large language model testing results.

Big Tech is aligning with the administration as Trump leans into pro-business policies. Industry titans like Amazon’s Jeff Bezos, Meta’s Mark Zuckerberg, and Apple’s Tim Cook attended Trump’s inauguration, underscoring a renewed partnership between the White House and Silicon Valley.

What’s next? Expect more executive orders this week, including clarity on tariff plans and updates on Trump’s national energy emergency declaration.

AI x Crypto=?

The rise of AI agent tokens is reshaping the crypto world, blending artificial intelligence with decentralized finance in a speculative frenzy. These AI-powered tokens, tied to bots capable of independent action, have skyrocketed in market value—from zero to $15.7 billion in just months. Analysts predict this could hit $250 billion by year-end.

• Big Names, Bigger Moves: Freysa AI and Griffain are making waves, while Artificial Superintelligence (FET) leads the pack with a $3.29 billion market cap.

• Utility or Hype? Critics call these tokens “meme coins on steroids,” but experts say their future hinges on delivering real AI-powered value, like data analytics, trend influence, or DeFi capabilities.

What’s Driving the Hype?

• Easy creation of tokens via platforms like Virtuals Protocol.

• Viral marketing through AI agents posting on X, Discord, and Telegram.

• Speculation fueled by the AI boom and crypto’s quick capital formation.

Reality Check:
While some tokens thrive on hype (think Luna and its AI-DOL persona), skepticism abounds. Experts caution against projects with no clear utility, likening this boom to NFTs’ rise and fall. Survivors will be the ones that marry real AI solutions with strong developer ecosystems.

Looking Ahead:
AI agents and their tokens may evolve beyond speculation, leveraging crypto-payment rails and DeFi for real-world use cases. As Franklin Templeton analyst David Alderman notes: “Experimentation and development will shape what’s next for this space.”

Double Down:

MicroStrategy (MSTR: $389.07, -1.87%) is doubling down on its crypto obsession, marking its 11th straight week of bitcoin accumulation.

By the Numbers:

• Total BTC held: 461,000 BTC

• Total cost: $29.3 billion

• Average BTC price: $63,610

They aren’t alone in thier bullish stance. Bitcoin miner CleanSpark (CLSK: $11.11, -7.33%) announced it now holds 10,087 BTC, having surpassed the 10K mark earlier this month.

As companies continue to stockpile bitcoin, MicroStrategy’s strategy is inspiring a wave of corporate adoption, further cementing bitcoin’s role as a digital reserve asset.

MuskTok? Looks Like More Than a Rumor

President Trump added fuel to the TikTok speculation fire, endorsing Elon Musk or Larry Ellison as potential buyers for the platform’s US operations. The plan? A 50-50 joint venture where the US government would own half in exchange for granting operational permits.

⚡ Key Details:

• Trump suggested Musk could lead a consortium to acquire TikTok.

• Oracle’s Ellison was also floated, boosting Oracle (ORCL: +7.17%) shares.

• Legal experts warn that the 50-50 proposal might violate divestiture laws designed to sever TikTok’s ties to ByteDance.

More Than Speculation?
With Musk’s influence and Ellison’s Oracle connections, this isn’t just a rumor anymore. The 75-day pause on TikTok’s ban gives Trump time to strike a deal—but legal and logistical challenges are piling up fast.

Push Pays Off:

United Airlines closed 2024 with a smooth landing—posting a record $985M profit in Q4, up 64% from last year. Adjusted earnings of $3.26/share left analysts’ expectations of $3.04 in the dust. Shares (UAL: $114.52) climbed 3.4% after hours on higher-than-expected Q1 profit forecasts.

• 174M passengers flown › An all-time record for United.

• Fuel costs down 7% YoY › Helping lift margins.

• Loyalty revenue up 12% YoY › Loyalty pays—literally.

The airline’s premium push is part of the story. With 4K seatback screens and Starlink WiFi upgrades rolling out in 2025 (free for loyalty members only), United is betting on travelers’ appetite for a luxury lift.

The competition isn’t far behind: Delta (DAL: +3.8%) ⬆️ and American Airlines (AAL: +2.0%) ⬆️ are also flying high on business travel’s comeback. With United shares up 185% over the past 12 months, analysts are optimistic that these profits have legs—or wings.

Tariffs Hit the Dollar:

The US dollar drifted lower on Wednesday as traders grappled with uncertainty around President Trump’s tariff proposals. Markets remain cautious following hints of potential duties on imports from China (10%), Mexico, and Canada (25%) starting February 1.

⚡ Currency Check:

• Dollar Index (DXY): ⬇️ -0.14% › 108

• Euro (EUR/USD): ⬇️ -0.07% › $1.0420

• Yen (JPY/USD): ⬆️ Slightly › 155.40

• Yuan (CNH/USD): Flat › 7.2735

The Market’s Take:
Analysts see Trump’s cautious approach to tariffs as a sign he’s positioning for negotiations rather than immediate action. Tony Sycamore of IG noted that restraint on China may ease inflation fears and reduce the odds of aggressive Fed rate hikes. Markets currently expect a quarter-point Fed rate cut by July and another by year-end.

Regional Moves:

• Canadian Dollar (CAD/USD): ⬇️ -0.1% › C$1.4335 › Struggling after hitting a multi-year low amid cooling inflation.

• Mexican Peso (MXN/USD): ⬇️ -0.1% › 20.6350 › Edged lower as traders factor in potential levies.

Outlook:
With Trump’s rhetoric leaning softer than his campaign promises, Alvin Tan from RBC Capital Markets suggests the dollar could weaken further. Meanwhile, traders are keeping an eye on the Bank of Japan, which is expected to raise rates by 0.25% this Friday, offering support to the yen.

Commodities Check: ✔️

• WTI Crude: ⬇️ -1.8% to $78.63 per barrel.

• Gold: ⬆️ +1% to $2,745.20 per ounce.

• Silver: ⬆️ +0.2% to $31.60 per ounce.
  

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Disclaimer

This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills.