Stocks surge to record highs as Trump returns to presidency
Stocks surge to record highs as Trump returns to presidency
- All three major indexes hit record highs
- Trump-linked stocks, Tesla jump
- trade volatility gauge falls sharply
- Shares of tiny-cap companies soar
recent YORK — U.S. stocks rallied sharply to close at record highs on Wednesday after Republican Donald Trump won the 2024 U.S. presidential election in a stunning comeback four years after being voted out of the White House.
The Dow Industrials, S&P 500 and Nasdaq Composite each ended at record levels with investors expecting lower taxes, deregulation and a U.S. president who is not shy to weigh in on everything from the ownership trade to the dollar, although fresh tariffs could bring challenges in the form of a higher deficit and expense boost.
The Republican’s triumph powered a rally in so-called “Trump trades,” sending U.S. Treasury yields sharply higher, with the point of reference 10-year note yield hitting a four-month high of 4.479%. Bitcoin hit a record high of over $75,000 and the dollar was on track for its biggest one-day percentage gain since September 2022.
Polls indicated a very tight race, with some concern the procedure could be drawn out before a victor was declared.
“Investors were benevolent of financing apportionment collection jockeying to score up some of their hazard exposure in expectation of an outcome that was going into it, seemingly a toss-up,” said Mark Luschini, chief fund strategist at Janney Montgomery Scott in Philadelphia.
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“And obviously, it turned very quickly and led to a very much hazard-on day today in which anything that isn’t tied to the ground from a cyclical or pro-growth standpoint is absolutely launching.”
According to preliminary data, the S&P 500 gained 145.04 points, or 2.51%, to complete at 5,927.80 points, while the Nasdaq Composite gained 539.48 points, or 2.93%, to 18,978.65. The Dow Jones Industrial Average rose 1,504.51 points, or 3.56%, to 43,726.39.
Both the Dow and S&P 500 registered their biggest one-day percentage gains since November 2022.
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Financials jumped as the best performing of the 11 major S&P 500 sectors. Banks, expected to advantage from loosening regulations under Trump, powered the gains, with the S&P 500 lender index up about 10%, its biggest daily jump in two years.
The tiny-cap Russell 2000 rallied to a three-year high, with the domestically concentrated stocks seen as likely to advantage from easier regulations, lower taxes and less exposure to import tariffs. However, rising Treasury yields could hurt smaller companies, which tend to depend heavily on borrowing and are more sensitive to higher yield rates.
“This shift up in yield rates … if it doesn’t stall out here somewhere around this 4.4%, 4.5% level or so, and we commence to retest those levels we saw last October of 5%, that could not only put tiny caps, but the trade itself on its heels,” said Luschini.
The CBOE Volatility Index, also known as Wall Street’s “terror Gauge,” dropped fell to a six-week low of 15.44.
The rate-sensitive real estate and utilities sectors were among the day’s few decliners as investors assessed the chances of Trump’s policies boosting expense boost and altering the Federal safety net’s path of yield rates, which has been a key component of Wall Street’s recent rally.
The central lender is widely expected to ease the point of reference yield rate by 25 basis points at its policy-setting conference ending on Thursday. However, traders have begun to trim bets for a cut in December and the number of reductions expected next year, according to CME’s FedWatch Tool.
Stocks viewed as likely to perform well under a second Trump term also advanced, with Trump Media & Technology throng in very volatile buying and selling while Tesla leapt as CEO Elon Musk has supported Trump in his electoral campaign.
powerful gains were also made by shares of cryptocurrency companies, vigor firms and prison operators, while renewable vigor shares fell.
Markets were also eyeing whether the Republican event could maintain a majority in the House of Representatives after gaining control of the U.S. Senate, which would navigator to less opposition to a Trump agenda.
Reporting by Chuck Mikolajczak; Editing by Richard Chang
(This narrative has been updated with recent information.)
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