The first days of the Trump presidency: 3 things we learned

President Trump signed more day-one executive orders than the last 10 presidents combined.

U.S. equity markets were higher in a shortened trading week, helping the S&P 500 to its first all-time high of 2025. Other international markets in Europe and Japan outperformed thanks to a more gradual approach on tariffs.

Tariff talk also saw the dollar tumble by its most since 2023 – albeit off elevated levels following its 10% rally since the end of September. Oil prices dropped back below the $80 per barrel level as traders prepared for increased supply amid the administration’s stance on increased drilling and a call for more supply from OPEC members.

We expected increased uncertainty under the new administration. That remains the case, and below we break down three things we learned in the early stages of the new presidency.

Three things we learned in the first three days of the new administration

1. A slew of executive orders. An executive order is a directive issued by the President of the United States to implement policy without the need for legislation passed by Congress. While they do not require approval from Congress, they are subject to judicial review and can be challenged in court if deemed unconstitutional or beyond the President's authority. We believe some of these orders placed so far will have no economic impact (see the proclamation on flying flags at full-staff on inauguration day), but we focus below on those that may affect markets across three themes.

• The labor market: Six of President Trump’s executive orders focus on limiting immigration, including stricter immigration laws, an enhanced vetting process for visa applicants and declaring a national emergency at the southern border. Net immigration increased by 3.3 million on average in 2023–2024—the largest in over 100 years. We think net immigration will cool to 500,000 in 2025 and 2026, similar to the flow during the latter half of Trump’s first term. This reduction in immigration has the potential to reduce the labor supply. A recent study from The Burning Glass Institute noted that undocumented workers are estimated to be about 7.2% (or nine million workers) of the U.S. workforce. The study also indicated that undocumented workers are overrepresented in states such as California, Texas and Nevada, and in sectors such as construction and agriculture. We’ll be looking for any indication of a regional or sectoral disruption in the supply of labor through reports like the Federal Reserve’s Beige Book.

• Energy: President Trump’s administration is incentivizing traditional fossil fuel sources of energy and disincentivizing renewable energy, as expected. The executive orders include promoting domestic energy development, suspending offshore wind leasing and reversing restrictions on drilling in Alaska. The goal is to lower energy prices by increasing supply. As Michael Cembalest, our Chairman of Asset and Wealth Management Strategy, noted in his Inauguruption piece, pipeline projects can be challenged for a number of reasons without explicit federal domain. This means the path to increased capacity can be challenging, especially as the United States has already produced more crude oil than any nation at any time for the past six years in a row.
• Tariffs: Perhaps the biggest surprise during this initial stage of the new administration is the lack of concrete tariff announcements. We cover what we know in detail below.

2. Tariff talk (and the lack thereof). President Trump threatened to impose tariffs on the U.S.’s top four trading partners—Mexico, Canada, China and the European Union—starting as soon as next week. However, no immediate tariffs were enacted. Trump’s executive order on trade includes studies to potentially overhaul U.S. trade policy, setting the stage for future tariff actions. As President Trump has previously indicated, tariffs can be used as a tool to raise revenues ahead of negotiations to extend Trump’s first-term tax cuts, which are expected to increase budget deficits.

Overall, the executive order lays the groundwork for potential future tariffs, with Trump using the threat of tariffs as leverage in international negotiations. While some of the tariff threats may be used as leverage, we believe there will be significant increases in tariffs toward China. The validity of tariffs threatened toward other trading partners is less clear in terms of timing and whether they are being used as bargaining chips (as was the case during Trump’s first term). For now, the lack of immediate action has provided some reassurance to critics and markets. We can look to currency markets as a gauge, and so far, dollar weakness suggests that international markets outside the U.S. are welcoming the news of a more gradual approach.

3. “Star”lit pathway to deregulation. SoftBank, OpenAI and Oracle Corp. have announced a joint venture called “Stargate” to fund artificial intelligence infrastructure. The initial investment is said to total $100 billion, with an aim to increase to at least $500 billion over the next four years. The venture seeks to build new infrastructure for OpenAI, including data centers and campuses.

The initiative was unveiled by President Donald Trump, but has been in the works since before his inauguration. Regardless, the backing of the venture, which aims to boost U.S. leadership in AI, is a concrete signal of the deregulation that the market has anticipated from this administration. President Trump has repealed the AI-focused executive order issued by former President Biden. The order required advanced AI developers to submit safety results to the federal government.

However, there is skepticism about the scale of the initiative and SoftBank’s ability to fund it (SoftBank had $25 billion in cash and equivalents on its balance sheet in Q3). Elon Musk also chimed in on social media, claiming that the companies behind the project don’t have enough money to follow through on their pledges. The importance of that conversation might have also stepped up over the weekend following reports that Chinese start-up DeepSeek had developed a cost-effective AI model that runs on less-advanced chips than their U.S. counterparts.

We believe the infrastructure spending needed to support the scaling AI business is a theme with room to run. For data centers alone, electricity demand is projected to nearly triple by 2030. The grid may need to add up to 18 gigawatts—about equivalent to three times New York City’s daily power demand. This means the infrastructure that supports these AI tools will need an upgrade. The Department of Energy estimates that 47,300 gigawatt-miles of additional transmission infrastructure will be needed by 2035. This represents a 57% increase to the current grid; for reference, the United States increased transmission line mileage by just 13% from 2004 to 2016.

While there are still many details of the administration’s policies to work out, your J.P. Morgan team is here to help you position portfolios for any outcome.