President-elect Donald Trump’s return to the White House has sent ripples through global financial markets, with many investors looking to recalibrate their portfolios for a dramatically different policy landscape ahead. The Republican sweep of the presidency and, potentially, both houses of Congress has triggered what analysts call the return of “Trump trades” — but with key differences to 2016 that could reshape the investment outlook. The immediate market reaction has been positive for U.S. assets , with small-cap stocks and sectors like banking and technology seeing solid gains. The Russell 2000 small-cap U.S. stock market index is up over 8% since election day, while the Nasdaq Composite is up around 6% and banks and financial institutions have rallied by more than 10%. Will the stock moves last? “The question down the line will be over the sustainability of the move, and that in turn will depend on bond yields’ behavior,” said Mislav Matejka, JPMorgan’s head of global and European equity strategy, in a research note. Unlike in 2016, when 10-year Treasury yields were generally around 2%, they now sit above 4%. This makes further rises in bond yields more challenging for equity markets to digest. Higher Treasury yields mean higher interest rates for corporate borrowers. Investors may also pull money from stocks to seek higher returns in Treasurys relative to the risk, which could push stock prices down. Trump’s tariffs Perhaps the biggest concern for investors globally is Trump’s campaign promise of aggressive new tariffs , including the potential for a universal 10% tariff on all imports and a 60% tariff on Chinese goods. Economists at Nomura, one of Japan’s largest investment banks, expect these policies to be a key focus early in Trump’s second term, warning that “tariffs are likely to be inflationary and negative for growth” in the U.S. As a result, the bank’s chief economist, David Seif, has forecast just one U.S. rate cut by the Federal Reserve next year — the consequence of which is likely to be felt globally. Impact on Asia Capital Economics expects most Asian currencies to weaken by up to 5% against the dollar over the coming year, not least because of the expected higher interest environment in the U.S. High interest rates typically attract fund flows into the United States, depriving emerging market economies of cheaper borrowing and the growth that follows. The impact of this can be seen in the Indian rupee , which fell to all-time lows against the U.S. dollar following the U.S. election. Korea, Taiwan and some other countries are also at high risk of being impacted by changes in U.S. trade policy, according to Goldman Sachs, given the amount they export into the country. However, some Asian nations might benefit if higher tariffs on China prompt manufacturers to relocate. “Vietnam, with its low labor costs and strategic geographical location, has so far been the biggest beneficiary of worsening U.S.-China relations,” said Gareth Leather, senior Asia economist at Capital Economics, in a note. In the past, India has also benefited from tariffs and risks associated with the U.S.-China trade relationship. “Potential tariff or non-tariff barriers on Chinese imports in the U.S. and India’s domestic manufacturing thrust with Make in India, could be positive for Indian [electronics manufacturing services] companies in areas like PCBs [electric circuits], semiconductors, mobile phones, cables and wires, among others,” said Macquarie Capital’s head of India research Aditya Suresh, citing cable and wire maker Polycab as an example of a stock that stands to benefit in this scenario. Europe Most analysts agree that U.S. trade tariffs are likely to hurt Europe, with some companies able to navigate the challenges better than others. “The European Union is highly exposed to U.S. tariffs because it is trade intensive, and the U.S. is the largest destination for EU exports,” Morningstar analysts said in a note to clients on Nov. 5. European automakers and pharmaceutical companies appear especially vulnerable. However, the impact varies by company depending on their U.S. manufacturing presence and the proportion of their global revenues derived from the U.S. “For companies with local production, the impact should be neutral to positive, while larger non-U.S. manufacturers will have to adapt or face margin headwinds if higher prices cannot be implemented,” said Swiss investment bank Vontobel’s senior equity analyst Mark Diethelm. In a note to clients, Diethelm suggested that Swiss building materials firm Holcim is likely to see a “positive impact” from the tariffs as many of its products are manufactured in the U.S. Others, such as electronics maker Logitech , could see a negative impact as it has a significant China-based manufacturing base. More broadly, investors should bear in mind that companies are likely to begin factoring in the impact of tariffs and move ahead of actual policy, according to Barclays. “Tariffs concern may continue to weigh on Europe this time around, but we note that any actual decision on tariffs is likely to require the new government and cabinet secretaries to be sworn in, which could be a process taking up to [six months], so this may not be an immediate risk,” said the bank’s chief European strategist Emmanuel Cau in a note to clients on Nov. 6. — CNBC’s Michael Bloom contributed reporting.