Stocks surge across sectors as investors respond to Trump's victory and policy expectations
Stocks surged on Wednesday, with major indices hitting record highs following Donald Trump's victory in the 2024 presidential election, as reported by CNBC.
The Dow Jones Industrial Average rose by 1,508.05 points, or 3.57 percent, to close at a record high of 43,729.93, marking its largest single-day gain since November 2022.
The S&P 500 and Nasdaq Composite also reached new peaks, with the S&P 500 gaining 2.53 percent to 5,929.04 and the Nasdaq rising 2.95 percent to close at 18,983.47.
NBC News projects Trump to have defeated his Democratic opponent, Kamala Harris, securing at least 291 Electoral College votes, including key swing states Pennsylvania, North Carolina, and Georgia.
Investors responded positively to Trump's win, with stocks in sectors expected to benefit from his policies posting strong gains.
Tesla, led by CEO Elon Musk, a prominent Trump supporter, saw its stock surge over 14 percent. Bank stocks also rallied, with JPMorgan Chase climbing 11.5 percent and Wells Fargo jumping 13 percent.
The small-cap Russell 2000 index rose 5.84 percent, reaching a 52-week high. Small-cap stocks, which are often more sensitive to domestic economic changes, are anticipated to benefit from Trump's tax cuts and protectionist stance.
According to Marc Pinto, head of Americas equities at Janus Henderson Investors, Trump is perceived as favouring “lower corporate tax rates, deregulation, and industrial policies” that could stimulate domestic growth and benefit risk assets.
Pinto noted that, similar to the “Trump rally” following the 2016 election, he anticipates a comparable trend in the markets this time.
Bitcoin also soared to a record high, surpassing $76,000, with investors speculating that it could benefit from reduced regulatory oversight.
Meanwhile, the dollar index reached its highest level since July, driven by expectations that Trump's proposed tariffs could strengthen the US dollar.
The 10-year Treasury yield rose to around 4.43 percent amid concerns that Trump's tax and spending plans might fuel economic growth but could also increase the fiscal deficit and inflation.
Trump Media & Technology Group, a social media company associated with Trump, saw its stock rise by 5.9 percent following a day of volatile trading.
In Congress, NBC News projects that Republicans are likely to regain control of the Senate. Although Democrats were initially expected to win the House, the outcome remains uncertain, leaving open the possibility of a ‘red sweep.’
A Republican majority in both chambers could lead to significant changes in spending and tax policy.
Mark Mobius, chair of the Mobius Emerging Opportunities Fund, suggested that a Republican-controlled government could further energize the US economy, stating, “If that happens, you’re going to see the US economy really taking off.”
