In our previous article, we provided an overview of the post-U.S. election market overview. In this follow-up, as President Trump assumes office this week, we will share our perspectives and stance on the current financial markets, delving into the key trends and developments that are shaping the investment environment under the new administration.

Tariff

Earlier this week, on his first day in office, President Donald Trump announced that starting February 1, the United States would implement a 25% tariff on imports from Canada, alongside a 10% tariff on goods exported from China to the U.S. Additionally, the administration signaled its intent to advance the Reciprocal Trade Act, which could introduce a uniform 10% baseline tariff on all imports into the U.S., potentially intensifying trade frictions.

These measures have already sparked significant disruptions in global trade flows. However, the U.S. economy continues to demonstrate strong performance, characterized by historically high employment levels and expanding consumer spending. Meanwhile, many other economies remain in a phase of relatively loose monetary policy, which contrasts with the U.S.'s economic trajectory.

In an environment of escalating trade tensions, countries heavily reliant on exports to the US are particularly vulnerable. Consequently, we advocate going long USD/CAD, and USD/CNH to potentially profit from a stronger dollar and further weakness in these currencies.

It is important to note, however, that should the US reach trade agreements with its counterparts or if market sentiment shifts abruptly, any resulting sharp rebound in the CAD, or CNH could weigh on these USD long positions. Meanwhile, inflation and wage growth trends in Japan point toward the possibility of the Bank of Japan gradually raising interest rates in the future. We believe the market is currently underestimating the likelihood of a near-term rate hike. As a result, shorting USD/JPY (effectively going long the yen) can serve as a partial hedge against overall market risks.

Heightened Global Uncertainty and Inflationary Risk

Trump has emphasized strong control over the U.S.-Mexico border, leading to ongoing tensions in U.S.-Mexico relations. With the overlap of stricter border control and tariff policies, investors are facing heightened global uncertainty. This environment has increased the demand for safe-haven assets, with gold standing out as an effective hedge against geopolitical volatility.

In addition, over the long term, gold has demonstrated a strong positive correlation with inflation. Given that Trump’s policies—supported by a Republican majority in both the House and Senate—could drive U.S. inflation higher in the long run, the demand for gold is expected to rise. This trend is particularly evident in the actions of central banks, which are likely to accelerate gold purchases in response to inflationary pressures. For instance, China’s central bank has reduced its U.S. Treasury holdings for two consecutive months while simultaneously increasing its gold reserves, underscoring this trend.

Beyond its inflation-hedging capabilities, gold also serves as an effective safeguard against sharp valuation corrections in U.S. equities under extreme conditions. As equity markets remain susceptible to potential overvaluation risks, gold’s role as a stabilizing component in portfolios becomes increasingly vital. Considering the current market environment, incorporating gold into investment portfolios appears to be a prudent strategy to enhance risk management and protect against economic and geopolitical uncertainties.

Deregulation Policy

President Donald Trump’s focus on rolling back regulations aims to lower corporate compliance costs and spur innovation across various industries. Since taking office this past Monday, he has swiftly moved in the artificial intelligence (AI) sphere by rescinding President Joe Biden’s 2023 AI executive order, which sought to mitigate AI-related risks and required AI companies to disclose safety testing results to federal authorities. The Biden-era order also mandated government agencies to develop AI testing standards and risk response measures—steps Trump had long criticized. Alongside revoking nearly 80 executive orders, President Trump on Tuesday endorsed “Project Stargate,” an AI venture led by OpenAI, Oracle, and SoftBank. This project plans to invest 500 billion dollars over the next four years to bolster America’s AI infrastructure. Collectively, the administration’s large-scale AI investments and deregulation measures herald a new phase in U.S. AI development.

Semiconductor Transformation
Ongoing shifts in AI computing from training to inference are driving demand for ASICs (Application-Specific Integrated Circuits). Compared to general-purpose GPUs, ASICs typically offer lower power consumption, reduced cost, and more specialized performance, making them an attractive alternative in certain AI workloads. The global application-specific integrated circuit (ASIC) market size was estimated at USD 17.7 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 6.1% from 2025 to 2030.

Marvell: The company has locked in custom ASIC orders from leading cloud providers such as Amazon, Google, and Microsoft. By 2025, Marvell could surpass rival Broadcom in terms of order volume.

Taiwan Semiconductor Manufacturing Company: By closely collaborating with major chipmakers, TSMC has fortified its technological edge, substantially outpacing Samsung and Intel. As a result, the foundry sector is progressing from a multi-player landscape toward an oligopoly led by a few dominant firms.

Data Centers ‍

Cloud computing remains central to digital transformation, with AI advancements and ongoing infrastructure upgrades fueling robust growth.

Amazon: Continues to dominate the cloud computing market and benefits from diversified revenue streams in advertising and e-commerce. These complementary business segments reinforce its long-term growth prospects.

Meta: Bolstered by a strong U.S. economy, Meta has seen a rebound in its advertising segment. Over time, its AI initiatives and metaverse strategy could achieve synergistic gains, enhancing overall performance.

AI Application Implementation

As AI shifts from being driven by computing power to focusing on practical applications, data analysis and decision support have become the core of enterprise digital transformation.

Palantir provides tailored AI solutions to government, healthcare, and finance, bolstering software demand and fostering strong customer loyalty. Long-term contracts with major clients secure high retention rates and solid recurring revenue.

Despite its already high valuation, Palantir’s growth outlook remains promising, especially given its U.S. expansion and rising government AI needs. Still, weak performance in Europe and declining revenue in the Middle East pose significant challenges.

AI’s Role in Driving the Nuclear Energy Industry
As AI technology scales, so does the demand for stable, high-capacity energy sources. As we have mentioned in our previous article, AI data centers require substantial, continuous power, and nuclear energy—being carbon-free and capable of providing reliable baseload electricity—fits that requirement. In tandem with deregulation policies, the government’s support for expanding nuclear infrastructure and uranium mining may accelerate growth in the nuclear sector. This synergy between AI’s expanding energy demands and nuclear’s capacity for large-scale, uninterrupted power underscores the potential for both industries to reinforce each other’s development. Under the previous administration, the Inflation Reduction Act was projected to inject approximately $1 trillion into green energy initiatives, with around 85% of that funding directed to Republican constituencies. This level of fiscal support highlights the resilience of the long-term energy transition trend.

Constellation Energy, the largest nuclear power operator in the United States with over 23 gigawatts of capacity, is targeting a 100% carbon-free power mix by 2040. From an investment perspective, the company demonstrates significant upside potential for three key reasons.

1.     A 20-year contract with Microsoft to supply electricity for AI data centers at premium rates, boosting revenue and margins.

2.     Recognition from NVIDIA’s CEO as a key partner in the AI ecosystem for delivering reliable, carbon-free energy.

3.     A partnership with Sunrun to offer residential energy solutions—including gas, electricity, and solar—across six states and Washington, D.C., thereby diversifying both its customer base and revenue streams.

Conclusion

In response to Trump’s tariffs, we maintain a positive view on the U.S. dollar—tempered by short USD/JPY positions for risk hedging—and foresee upside potential for gold amid heightened global uncertainties and inflationary pressures. In addition, AI-driven industries and the nuclear energy sector appear poised for sustained growth, supported by both government policy and market demand.

Disclaimer: Our beliefs represent our in-house views and should not be interpreted as investment recommendations. Investors should conduct their own independent research before making any investment decisions.

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