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Stocks rallied at Wednesday’s New York market open after Donald Trump claimed victory in the 2024 US presidential election.
The Dow Jones Index jumped 3%, while the broader S&P 500 and the tech-heavy Nasdaq 100 both rose around 2%. The small-cap benchmark Russell 2000, another projected Trump beneficiary, rallied 5%. In Toronto, the S&P/TSX made small gains in afternoon trading.
At the same time, the US dollar index hit its highest point since July, rallying against other global currencies.
Markets Like Clear Visibility
“With the Republican party on the cusp of a clean sweep of Congress and the presidency, US markets are rallying. This is less an endorsement of every facet of the Republican manifesto, but because markets like visibility, and clear governmental control provides that”, says Michael Field, European market strategist at Morningstar.
“We are likely in for a busy, and eventful four years, with Trump knowing that he needs to hit the ground running and get policy changes done while Republicans control the two houses,” Morningstar’s Field observed. “The Euro is down, and rightly so given the likelihood of at least some of these policies negatively affecting the region. Expect a brief pause after the results, before the real action begins. “
Cryptocurrencies, which are considered part of the so-called Trump trade, rallied as well. Bitcoin surpassed $75,000, topping its previous all-time peak reached in March. Donald Trump has voiced his support of cryptocurrencies in the past.
Other popular picks within the Trump trade also outperformed such as Trump Media & Technology Group DJT and Tesla TSLA, headed by vocal Trump supporter and donor Elon Musk.
The 10-year Treasury yield jumped to around 4.43% Wednesday from 4.26% Tuesday on speculation Trump’s proposed tax cuts and other spending plans would increase the fiscal deficit, while possible tariffs could reignite inflation.
In the background, investors also expect that the potential for the Republican party to claim control of Congress could also open the door to substantial corporate tax rate cuts and lessened regulatory pressures.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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