What Wall Street Says

Meanwhile, the 10-year Treasury bond is rising. Experts believe Trump's desire to raise tariffs on imports and cut taxes could spur inflation, which could slow the pace of interest rate cuts by the Federal Reserve.

“Overall, however, we believe a Trump victory means higher inflation in the near term compared to the status quo with Harris, but slower growth (perhaps a reduction in GDP of up to 0.5 percentage points in 2025 and 2026),” says Rich, head of global strategy at TD Kelley wrote. “As far as FOMC policy is concerned, we expect the Fed to continue easing this year, but will likely pause in the first half of 2025 as it waits to get a better sense of the impact “The new government’s policies focus on inflation and growth.”

Here's what Wall Street said in the opening offering on some key issues following Trump's historic victory.

“The Fed is important, but it probably isn't as important as it used to be. Markets are still pricing the probability of a rate cut at over 90%? What does this mean for inflation and interest rates? If we look at all of that together, it probably means that whatever path the Fed takes, they're going to move a little slower when we have a little bit stronger growth. a little more inflation, but overall I would prefer a strong economy supporting earnings over an economy that needs further rate cuts because it is weakening.

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“Tesla was one of the shorts I suggested last week if Harris had won. That's clearly not going to happen. It's all about Musk and what Musk is going to get. And whether Musk gets that role in a government efficiency ministry, they sort out the whole autonomous driving thing, and then that will finally be something that you can say is really different and valuable at Tesla.

“I suspect this is probably a refresher policy that will not last. There are some fantastic things that could very well happen for Musk in a new administration. And one of the things I kind of jokingly commented on last week is: Imagine that in Trump's second year, Musk, with his undoubted abilities, saves the ailing Boeing, joins forces with Musk's SpaceX and creates something new and really exciting.

“Definitely buy (the “Magnificent 7,” which consists of Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta and Tesla), absolutely 100%. I mean, that's pretty much the only area that's seeing strong earnings growth anywhere.” In a world where money is flowing into stocks, I just don't see any earnings power.

Three Times a Week, Editor-in-Chief of Yahoo Finance Brian Sozzi offers insightful conversations and chats with the biggest names in business and markets Opening bid. You can find more episodes on our Video Hub or look at yours preferred streaming service.

Brian Sozzi is Editor-in-Chief of Yahoo Finance. Follow Sozzi on X @BrianSozzi and further LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].

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