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By Canan Sevgili, Paolo Laudani, Vera Dvorakova and Alessandro Parodi

(Reuters) -In the year since Donald Trump’s election as U.S. president, global financial markets have had to navigate policy shocks and unprecedented uncertainty and high volatility, with stocks, gold and crypto hitting record highs.

After Trump defeated Democratic rival Kamala Harris on November 5, 2024, the dollar roared higher, along with stocks and bitcoin, while Treasury yields rose, as investors priced in the likelihood of greater strain on U.S. finances.

Since then, the U.S. administration has struck deals on trade, while upending global supply chains and decades of post-war international diplomacy.

Investors are learning to ride out the unpredictability, including clear ways to trade Trump’s tendency to amp up threats only to later back down. The so-called TACO trade – “Trump always chickens out” – has become a feature.

Here is a snapshot of where major markets are now, compared to when Trump was elected.

UP THE BIT, DOWN THE GREEN

The dollar has offered the clearest reflection of how the rest of the world has reacted to Trump’s erratic approach. It surged after the election, as investors bought into the idea that a Trump-fuelled spending splurge would fuel the economy, but it has lost a net 4% in value since then.

Trump’s tariffs on trade partners and uncertainty over their impact have driven investors to find alternatives. His crypto-friendly policies, which have drawn scrutiny over unprecedented conflict of interest, have sent bitcoin to a record high of $125,835.92 in October. Geopolitical tensions and tariffs have also driven gold, a classic safe-haven, to a record $4,381 an ounce in October.

Demand for dollars is unlikely to wane any time soon as when financial market turbulence or geopolitics heats up, it is often investors’ first choice, or “the cleanest dirty shirt”, as Piotr Matys, senior FX analyst at In Touch Capital Markets, says.

CHECKING IN ON STOCKS

Stock markets everywhere have hit record highs this year, powered in large part by enthusiasm over artificial intelligence and the prospect of lower global interest rates.

Trump’s April 2 “Liberation Day” tariff announcement was a first major test and it hit markets hard. The MSCI World Index tumbled 10%, but has since rebounded to record highs, gaining over 20% since Election Day.

The S&P 500 is up 17% since last November, thanks to AI fever, while in Europe, defense stocks have been at the heart of the rally, as Trump forced regional governments to spend more on their own security, while war rages in Ukraine. Tech-fueled rallies and a softer dollar have boosted equities in Japan, South Korea, and China too.

TESLA – AN ELECTRIC YO-YO

Trump’s relationship with Elon Musk, the world’s richest man, was a key driver of Tesla stock in the weeks after the election. Musk had spent over $250 million backing Trump’s reelection bid last year and even joined his campaign trail.

Musk’s fortune swelled, as shares in his EV maker almost doubled in less than two months to hit a record high of $488.5.

But the honeymoon did not last. After Musk launched Trump’s budget-slashing Department of Government Efficiency (DOGE) in January, Tesla’s brand loyalty rate dropped dramatically as the CEO’s flirtation with politics spooked buyers, contributing to a drop in deliveries for two consecutive quarters.

Tesla shares hit a low in April before rebounding as tensions between Musk and Trump spilled into the open, culminating in a split by late May.

Despite the turbulence, the world’s most valuable carmaker has outperformed struggling legacy rivals, including Detroit’s GM, Ford and Stellantis.

BOND YIELDS RISE

Since Trump’s election, bond yields have surged across major economies, reflecting investor concerns over rising government borrowing and the sustainability of public finances.

One of the concerns among investors in U.S. Treasuries was the likely cost of funding Trump’s planned tax cuts. His “One Big Beautiful Bill”, which passed in July, is expected to increase the federal deficit by around $3.8 trillion in the coming 10 years.

However, with the Federal Reserve cutting rates and inflation seemingly contained, 30-year Treasury yields are up just 14 basis points at 4.66% since last November.

The rise in Japanese government bonds (JGB) has been more aggressive, with 30-year yields up nearly 85 basis points to record highs while French and German 30-year yields are up 62 and 59 bps, respectively, since November 5, 2024.

BALANCING TRADE

One of Trump’s key areas of focus is the U.S. trade balance, something he says is proof America is being “ripped off” by partner countries and that tariffs, aside from being “the most beautiful word in the dictionary” are the only way to correct it.

Trump’s tariffs have driven up the cost of doing business and made planning more complicated. But they are eroding the trade deficit. The most recent data shows it hit a two-year low of $60.2 billion in June, and the deficit with China shrank by 70% over five months to its lowest level in over 21 years.

Similarly, the U.S.-EU trade balance spiked ahead of the tariff announcement before declining. This suggests that “the trade war may be hurting the EU more than it does China,” which has a stronger back-up plan than the Europeans, said Ipek Ozkardeskaya, a senior analyst with Swissquote.

(Reporting by Canan Sevgili, Paolo Laudani, Vera Dvorakova, and Alessandro Parodi, Additional reporting by Arda Dipova; Editing by Amanda Cooper and Conor Humphries)

Xage Security, vendor of Zero Trust access and protection, announced the integration of its Xage Fabric Platform with the NVIDIA BlueField Data Processing Unit (DPU), delivering advanced security controls for AI factories and critical infrastructure. 

Leveraging the advanced hardware acceleration of BlueField-3, Xage scales identity-based access controls across massive data centers and mission-critical environments, ensuring exceptional performance and resilience. With Xage’s Zero Trust enforcement for humans, systems, AI models and agents, organizations gain a complete, closed-loop security architecture. 

“Given the massive innovation opportunities of AI, we need to make sure that organizations’ deployments are not held back by cybersecurity gaps—and we need to have the necessary protections run at extraordinary speed and scale,” said Roman Arutyunov, co-founder and senior vice president of product at Xage Security. “That’s why we’re collaborating with NVIDIA to help deliver lightning-fast and jailbreak-proof security at the heart of the modern AI factory and AI-enabled critical infrastructure.”

“As AI factories emerge as the foundational infrastructure accelerating AI innovation, safeguarding them has become a critical priority,” said Ofir Arkin, senoir distinguished architect for cybersecurity at NVIDIA. “Together, NVIDIA BlueField and Xage’s zero-trust security enable organizations to modernize their protection strategies across AI factories and infrastructure —driving secure, scalable innovation forward.”

Agentic AI systems rely on autonomous agents that collaborate with other agents, models, and APIs to make decisions and take action. Xage’s dynamic access control integration of NVIDIA BlueField provides a software-defined, hardware-accelerated foundation to govern and enforce data flows between agents and models in real time.

Xage applies least-privilege controls at every step of these interactions, governing not only which agents can access specific data, pipelines, or models, but also the exact actions agents can perform, and for how long. With role-based segmentation running at line speed on BlueField, organizations can prevent unauthorized privilege escalation and data leakage, and enforce policy-based privilege deescalation to block risky actions, ensuring that AI agents remain trustworthy and compliant as they scale and evolve.

To further safeguard operations, Xage delivers definitive, resilient controls that are enforced even as AI systems self-modify or generate new behaviors. This gives enterprises the confidence to unlock the full productivity and potential of agentic AI, without exposing themselves to undue risk, even in the most complex, autonomous environments.

Xage also enforces secure separation of AI workloads, preventing lateral movement and safeguarding datasets, workloads, and models. Thanks to its implementation directly on the BlueField DPU, Xage’s identity-based segmentation operates at line speed, delivering low-latency, high-efficiency security that reduces the attack surface without sacrificing performance.

Finally, Xage delivers full-stack protection for mission-critical systems and applications, providing robust access controls and protection not just for AI, but the full IT and operational technology (OT) stack in the data center and critical infrastructure environments.

By running on NVIDIA BlueField, Xage brings hardware-accelerated Zero Trust enforcement to the most demanding environments, from data centers to critical infrastructure in sectors such as energy, manufacturing, utilities, and transportation where millions of assets and billions of data flows must be secured in real time. 

This integration makes it possible to govern and enforce access to assets and data at unprecedented scale, preventing unauthorized activity and containing threats before they can disrupt essential services.

Beyond protection and performance, Xage provides auditable identity and access controls to help organizations achieve compliance with cybersecurity and AI regulations, including NIST, NERC CIP, EU NIS2, and U.S. Zero Trust mandates. By supporting full visibility into who or what acts on data, models, and infrastructure, Xage builds assurance into AI-powered operations.