The Trump / Musk Bromance — What Markets Should Watch Out For

As Donald Trump returns to the presidency in 2025, markets are preparing for notable shifts across various sectors, including stocks, forex and cryptocurrencies. But what about the Musk factor? The incoming president and the world’s richest man have remained seemingly inseparable in recent weeks as Musk has sat in on calls with world leaders, joined Trump and his family members for meals, and is a constant presence as the president-elect charts out his second administration. Our team will be following the shifts closely and here are some of our initial predictions for the financial markets.

The friendship has paved the way for some viral AI generated TikToks and memes:

What Donald Trump Might Do

• Trump may adopt a business-friendly stance with Musk as an ally. Policy shifts could include deregulating AI and cryptocurrencies, potentially boosting tech and financial markets
• Trump may prioritise AI-driven national security measures and further investment in space exploration, aligning with Musk’s interests. These policies would enhance the U.S.’s competitive edge against global rivals.
• The stock market historically performed strongly during Trump’s first term, with the S&P 500 rising by 70% due to corporate tax cuts and deregulation. Analysts expect a similar short-term boost, with projections for another rally driven by potential tax reforms and infrastructure spending.
• Trump’s stance on trade and potential tariff wars could lead to fluctuations in the U.S. dollar. A protectionist agenda, if renewed, might weaken the dollar against other major currencies. However, a strong push for domestic economic growth might counteract this by attracting foreign investment. Forex traders are closely watching these dynamics as Trump’s policies unfold. As is our team!
• JPMorgan anticipates significant gains for Bitcoin, tied to what it calls the “debasement trade.” Trump’s fiscal expansion and geopolitical tensions are expected to boost Bitcoin and gold as safe-haven assets. Bitcoin’s recent upward momentum following his election victory reflects investor confidence in these predictions. This trend aligns with increased central bank gold purchases, which may also bolster the broader crypto market

While markets could benefit from a business-friendly agenda, risks include inflation from deficit spending and potential geopolitical disruptions. Predictions about Elon Musk and Donald Trump in 2025 involve significant developments in technology, policy, and business.

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“Elon Musk and President Trump are great friends and brilliant leaders working together to Make America Great Again. Elon Musk is a once in a generation businessman and our federal bureaucracy will certainly benefit from his ideas and efficiency.” said Karoline Leavitt, Trump-Vance transition spokesperson.

What Elon Musk Might Do

• President-elect Donald Trump and Elon Musk have big ambitions for making the federal government leaner and more efficient by reviewing its budget and operations from top to bottom. Musk has warned that his goals include cutting at least $2 trillion in federal spending, partly by axing inefficient federal workers.
• Musk’s ambitions for Mars colonisation through SpaceX continue, with potential support from a Trump administration favouring deregulation. This could accelerate missions under NASA’s Artemis program, which SpaceX heavily supports.

President-elect Donald Trump listens as Elon Musk explains the operations ahead of the launch of the sixth test flight of the SpaceX Starship rocket. photo by Brandon Bell

• He also envisions a future driven by AI and robotics, proposing advancements in autonomous vehicles and humanoid robots to reshape industries. These technologies could face fewer regulatory hurdles if pro-tech policies under Trump prevail.
• Tesla could see short-term stock rallies if Trump reintroduces lenient regulations and protects EV manufacturing from foreign competition. However, Musk’s involvement in policy could lead to mixed market reactions over time.

Potential Challenges

Critics warn that Trump’s tendency for administrative unpredictability and Musk’s controversial and often volatile leadership style could create volatility. Concerns about policy execution, market reactions, and societal readiness for such rapid changes could temper the optimism surrounding their visions.

Both figures are positioned to influence transformative changes, with their partnership potentially shaping technology, governance, and global markets. And both have a captive audience. With 611 million active monthly users on X (Formerly Twitter) for Musk, and the world stage for Trump as president, we should expect to see some interesting developments next year.

A great alliance that will benefit the economy, or a disaster waiting to happen? Comment below and tell us what you think. For expert financial marketing, book a free Zoom call with our team.