The US stock market and other financial assets surged on Wednesday after media outlets started declaring victory for Donald Trump in the presidential election.
Kamala Harris has called Donald Trump to “congratulate him on winning the 2024 presidential election,” a senior aide to the vice president has told NBC News, marking what amounts to a formal concession of the race.
On Wednesday, the Dow Jones Industrial Average jumped more than 1,430 points, or 3.4%, in a single day record surge for the blue-chip index since November 2022. The broader S&P 500 and tech-heavy Nasdaq also hit record highs, both rising up by over 2%.
The Russell 2000, which tracks smaller companies most exposed to the US economy, surged 4.7% on expectations of Trump’s tax cuts and protectionist policies. The 10-year Treasury yield bounced to 4.43% while the dollar index jumped 1.7% to 105.13.
“For now, investor sentiment is pro-growth, pro-deregulation, and pro-markets, as seen in the overnight market action,” David Bahnsen, chief investment officer at The Bahnsen Group, was quoted as saying by CNBC. “There is also an assumption that M&A activity will pick up and that more tax cuts are coming or the existing ones will be extended. This creates a strong backdrop for stocks,” he claimed.
The cryptocurrency industry is also anticipating more market-friendly policies and regulations being eased after Trump embraced digital assets during his campaign. The flagship crypto, Bitcoin, shot up to an all-time high of $75,000 per coin early on Wednesday. The new president-elect has promised to make the US the “crypto capital of the planet.”
Tesla, whose CEO Elon Musk is a staunch Trump supporter, also saw shares soar almost 14%.
Meanwhile, Angelo Kourkafas, senior investment strategist at Edward Jones, told CNBC that Wednesday’s surge in stocks is not just a reaction to a Trump victory but also a relief that the election outcome is clear.
“A decisive win removes the overhang of an unclear or a contested outcome. And that by itself clears some of the uncertainty and is helping that strong reaction we are seeing in the markets,” Kourkafas claimed, noting that the rally could lose some steam in the coming days.
“We tend historically to see markets overreact the day after the election…” he pointed out.