The Year of Turbulence in Financial Markets: A Trump-Driven Narrative
To encapsulate the tumultuous financial climate of the past year, one term unequivocally prevails—Trump.
The President of the United States has been pivotal at all significant turning points, with his controversial ‘Liberation Day’ tariff declarations on April 2 serving as a primary catalyst, plunging global markets into a chaotic freefall.
This extreme volatility cannot be attributed solely to the tariffs themselves, but rather to the immense uncertainty they engendered as Trump embarked on protracted and contentious trade negotiations with various nations.
Allies Encounter Unprecedented Tariffs
In a striking departure from diplomatic norms, it became apparent that no nation was exempt from Trump’s tariffs—be they devoted allies or antagonistic states. Remarkably, the President reserved some of the harshest measures for countries traditionally supportive of America’s global role.
The erratic application of tariffs, coupled with steep retaliatory levies for perceived offenses, significantly unsettled global markets, which had enjoyed a prolonged era of free trade and decreasing tariff barriers.
The Proliferation of Tariff Myths
Astoundingly, Trump managed to persuade vast segments of the American populace that foreign nations were shouldering the financial burden of new tariffs, a misconception that, in reality, translated into higher costs for everyday Americans.
As the debate ensues over the plausibility of perpetuating this fallacy amidst rising prices, it reflects the cognitive dissonance characteristic of a leader who skillfully evades accountability.
While the long-term implications of the tariff confrontation remain uncertain, an initial market upheaval has morphed into an explosive surge for artificial intelligence stocks, as well as related sectors, including copper mining, energy provision, and semiconductor manufacturing.
Although an American farmer grappling with inflated fertilizer prices may dispute this narrative, the resurgence of investor enthusiasm propelled stocks to unprecedented heights, connecting with an AI-driven momentum that reverberated across global markets, Australia included.
The Australian Securities Exchange (ASX) experienced a robust recovery, boasting an approximate 14% increase from its April trough post-Trump’s press conference.
Nonetheless, Australia has lagged behind, observing a modest 6% upturn in 2025, a sharp contrast to the impressive double-digit gains recorded by markets in China, Japan, Europe, and the United States.
Commonwealth Shares Puzzle Investors
Within the Australian market, a notable episode was the fluctuating share price of the Commonwealth Bank of Australia (CBA), the nation’s most valuable entity.
With the rise of passive investing through exchange-traded funds tied to the ASX 200 index, the shares of leading companies, particularly CBA, saw inflated valuations despite analysts issuing persistent sell recommendations.
Against this backdrop, CBA’s share price soared to a staggering $191.40 in July, prompting even major shareholders like the Australian Foundation Investment Company (AFI) to seize the opportunity to divest, signaling potential market correction.
Ultimately, gravity exerted its influence, leading to a remarkable decline of approximately 20%, with shares settling at $152.74 amidst ongoing sell calls from brokers.
In tandem, other major banking stocks, along with household names such as Telstra (TLS), Wesfarmers (WES), and CSL (CSL), also witnessed declines in the latter half of the year.
Positive Prospects for Copper Amid AI and Electrification
Although Australia’s technology sector remains nascent compared to its counterparts in the US, Europe, and Japan, the upcoming year presents a unique opportunity as excitement surrounding AI and data centers broadens to encompass essential raw material producers.
Among these, copper holds paramount importance—not only for data centers but also in the electric vehicle boom and expansion of renewable energy. Australia boasts prominent copper producers such as BHP (BHP) and Rio Tinto (RIO), both of which are poised to amplify their share prices.
Gold’s Ascendancy Amid Uncertainty
The gold sector, another domain where Australia excels, has flourished, with President Trump inadvertently acting in its favor despite his tough trade stance.
Current projections suggest that Australia could export an astounding $60 billion in gold by 2025-26, positioning gold as the nation’s second-most significant export following iron ore, surpassing liquefied natural gas (LNG).
Conveniently, gold remains exempt from US tariffs, and the nearly 30% year-on-year growth illustrates Trump’s unintended contribution to this sector, even as the escalating gold prices are largely attributed to global economic uncertainties—largely ignited by the trade tensions he orchestrated.
Consequently, the share prices of publicly listed gold producers in Australia have surged in tandem with skyrocketing gold valuations, as miners scramble to maximize exports of the precious metal.
In summary, while President Trump has sown considerable anxiety among Australian investors, he has also generated substantial avenues for profit that the nation has been quick to capitalize on.
As uncertainties persist, they concurrently present opportunities; thus, vigilance regarding Trump’s maneuvers will remain crucial in navigating markets both domestically and internationally in the forthcoming year.
Source link: Tradingview.com.
