Trump's Second Term Begins: Wall Street Predicts the Trajectory of Gold, Bitcoin, and the Broader Market

Trump's Second Term Begins: Wall Street Predicts the Trajectory of Gold, Bitcoin, and the Broader MarketWall Street investors widely believe that certain asset classes, such as gold and Bitcoin, may mirror their performance from Trump's 2017 inauguration, at least in the short term. The overall optimism spurred by expectations of pro-business policies in Trump's second term has propelled the S&P 500 nearly 4% higher since the election

Trump's Second Term Begins: Wall Street Predicts the Trajectory of Gold, Bitcoin, and the Broader Market

Wall Street investors widely believe that certain asset classes, such as gold and Bitcoin, may mirror their performance from Trump's 2017 inauguration, at least in the short term. The overall optimism spurred by expectations of pro-business policies in Trump's second term has propelled the S&P 500 nearly 4% higher since the election. Friday alone saw a 2.9% surge, marking the index's best weekly performance since early November. However, this impressive rally doesn't obscure the significant uncertainty facing the market. Anticipated tariff policies, a dwindling rate-cutting cycle, and the unpredictability of new government regulations leave investors questioning the sustainability of the bull market. Against this backdrop, CNBC Pro analyzed the performance of select assets during the first 100 days of Trump's first term and consulted three investors to explore the potential for a repeat performance.

U.S. Stock Indices: Cautious Optimism, Significant Headwinds

During the first 100 days of Trump's first term in 2017, the three major stock indices all saw gains: the S&P 500 rose 5.3%, the Dow Jones Industrial Average climbed 6.1%, and the tech-heavy Nasdaq Composite jumped 9.2%. However, investors believe such substantial gains are unlikely to be replicated this time.

Jeff Kilburg, founder and CEO of KKM Financial, stated, "Compared to 'Trump 1.0,' we've already seen the S&P 500 deliver nearly 25% returns for two consecutive years. Repeating that performance will be extremely challenging unless we see further increases in consumer demand and corporate profits."

Art Hogan, chief market strategist at B. Riley Wealth Management, added that a market pullback is eventually reasonable, and investors are waiting to assess potential policy shifts from the new administration. "We have a new administration this year, bringing uncertainty around new policies. I think investors are likely mostly on the sidelines, and thats been pretty evident so far. We're basically flat for the year," he told CNBC.

S&P 500 Sectors: Energy Leads, Tech Faces Potential Correction

In the first 100 days of Trump's first term in 2017, the Information Technology sector surged 11.5%, while the Energy sector declined 8.2%. Currently, however, the Energy sector leads the market with a 9.2% gain, while Technology is down 0.2%, making it the second-worst-performing sector in the S&P 500.

All three investors believe energy stocks may continue to outperform. Hogan stated, "The supply-demand fundamentals in energy products are more balanced than commodity prices reflect. Energy stocks have very reasonable P/E ratios, and the companies are paying attractive dividends. That's going to be one of the better-performing sectors."

While the AI investment boom will continue to drive tech stocks higher, the three investors believe that the Technology sector might not perform as well in 2025 as it has in the past few years. Kilburg said, "We have to be realistic; we're not going to see that kind of rapid increase like we did post-pandemic. Tech is still a theme for 2025, but I think we'll see significant repricing in the first half of the year because they've gone up too much, too fast."

Regarding other sectors, Hogan and Kilburg both see the Healthcare sector potentially performing well in the near future. Hogan also pointed to the Financials sector as attractive due to a healthier interest rate environment and increased capital market activity for banks.

Oil Prices: Geopolitics and Regulatory Easing as Upward Drivers

Oil prices fluctuated significantly during Trump's first 100 days but ultimately finished below their pre-100-day level. The three investors predict oil prices will rise this time.

Kilburg stated, "My view is if Trump can bring peace to the Middle Eastand it looks like he's already done that before the inaugurationthen oil prices will go up." Indeed, West Texas Intermediate and Brent crude futures have already risen over 8% in 2025.

Peter Boockvar, chief investment officer at Bleakley Financial Group, mentioned that new U.S. sanctions on Russian oil producers could be another catalyst for higher oil prices. Hogan added that regulatory easing under Trump's second term could aid energy distribution and transportation, ultimately benefiting overall supply.

Gasoline Prices: Divergent Predictions

Boockvar noted that gasoline prices rose from January to April 2017, but predicting gasoline's trajectory this time is more challenging because natural gas prices haven't fully reflected the impact of rising crude prices.

Hogan believes gasoline prices will remain unchanged as long as crude oil prices stay within a range. "We might see an average price of WTI crude in the $75 to $85 a barrel range. That would imply gasoline prices staying around $3 a gallon, ceteris paribus," he said. "I don't think that's going to change dramatically."

Conversely, Kilburg believes U.S. consumers will face increased pressure from higher fuel prices. "The increase in oil prices is starting from a low base of depressed crude oil prices. So, I think that will be a challenge for the first 100 days of the new administration," he told CNBC.

Gold and Bitcoin: Safe-Haven Sentiment and Policy Expectations

All three investors believe gold will rise in the next 100 days, mirroring its performance in 2017. Hogan attributes this to geopolitical uncertainty, while Kilburg points to inflation concerns. Boockvar added, "Gold can go up in the face of a strong dollar and rising real interest rates because central bank demand is very strong. I don't see that changing with a change in administration. If we start putting tariffs on other countries, I think people will be more inclined to buy gold."

On the other hand, Hogan suggests that a more crypto-friendly policy environment and broader acceptance of Bitcoin as an asset class may continue to drive its price higher. Bitcoin extended its rally last week, breaking the $100,000 mark. However, Kilburg believes Bitcoin may see a pullback. "There's an old saying 'buy the rumor, sell the news.' If the U.S. government isn't buying Bitcoin in the first 100 days, we'll see a pullback in Bitcoin," he said.

U.S. Dollar: Potential Strength May Be Short-Lived

The U.S. dollar appreciated against other major currencies from January to April 2017. Since Trump's reelection, the dollar has again strengthened, fueled by his more protectionist and pro-tariff policies. But Boockvar and Hogan both believe this dollar surge may soon lose momentum.

Boockvar stated, "I think Trump might like a weaker dollar. So, if I had to guess, I think the dollar strength we've seen may already reflect most of the upside we're going to see."

Hogan added that slowing U.S. GDP growth could curb dollar strength in the short term. "I think the dollar might be at a little bit of a peak as we enter the new administration. But I certainly don't think it's going to collapse and become a negative factor," he said.

Conversely, Kilburg is relatively optimistic, suggesting the dollar will continue to appreciate. "I think the dollar will continue to go up, but not another 10% unless we see massive tariffs," he said.

U.S. Treasury Yields: Short-Term Volatility, Divergent Long-Term Views

U.S. benchmark Treasury yields have risen significantly since 2017. On Friday, the 2-year Treasury yield was around 4.283%, and the benchmark 10-year yield was approximately 4.623%. Because the front end of the yield curve is influenced by the federal funds rate, the three investors agree that the 2-year Treasury yield is likely to remain at its current level. Hogan stated, "The 2-year Treasury yield will likely continue to reflect our interpretation of Fed monetary policy, and if they only cut rates one more time, that level is probably reasonable."

The 10-year Treasury yield, which is more reflective of investor sentiment toward economic growth, may stabilize between 4.25% and 4.75%. On the other hand, Boockvar and Kilburg both believe long-term Treasury yields will rise. Kilburg believes the yield curve may temporarily steepen as bondholders demand higher returns. "I actually think the 10-year Treasury yield will break through 5% in the short term. Then some large institutional bond holders will readjust, and then it will come back down to around 4.5%. I think the first 100 days will be a period of wild swings in interest rates," he said.