4:10pm: Wall Street hits record highs
Stocks soared to record highs on Wednesday following Donald Trump's presidential election victory over Kamala Harris.
The Dow Jones Industrial Average surged 3.5%, or about 1,500 points, marking its best day since 2022, while the S&P 500 rose 2.5% to top the 5,900 level. The Nasdaq Composite also gained 2.9%, reaching a new record. The 10-year Treasury yield climbed to 4.43%, and Bitcoin hit a record as the dollar strengthened, driven by the so-called "Trump trade."
Financial stocks led the gains, with the S&P Regional Banking ETF jumping over 11%, while the small-cap Russell 2000, which includes regional banks, surged more than 5%.
Tesla shares soared nearly 15% as CEO Elon Musk, a vocal Trump supporter, received praise from Trump in his victory speech, referring to him as a "super genius."
3:10pm: Tech CEOs congratulate Trump
Big Tech CEOs are coming out to congratulate Donald Trump on his election victory.
Amazon and Blue Origin CEO Jeff Bezos hailed the now President-elect's "extraordinary political comeback."
Big congratulations to our 45th and now 47th President on an extraordinary political comeback and decisive victory. No nation has bigger opportunities. Wishing @realDonaldTrump all success in leading and uniting the America we all love.
— Jeff Bezos (@JeffBezos) November 6, 2024
Apple's Tim Cook urged Trump to "help make sure the United States continues to lead with and be fueled by ingenuity, innovation, and creativity."
Congratulations President Trump on your victory! We look forward to engaging with you and your administration to help make sure the United States continues to lead with and be fueled by ingenuity, innovation, and creativity.
— Tim Cook (@tim_cook) November 6, 2024
Satya Nadella, CEO at Microsoft, offered a similar sentiment.
Congratulations President Trump, we’re looking forward to engaging with you and your administration to drive innovation forward that creates new growth and opportunity for the United States and the world.
— Satya Nadella (@satyanadella) November 6, 2024
And of course Elon Musk, a vocal Trump supporter whose Tesla stands to be a big beneficiary of Trump's anticipated policies, posted this on his platform X:
Let that sink in pic.twitter.com/XvYFtDrhRm
— Elon Musk (@elonmusk) November 6, 2024
2:05pm: S&P set to climb in 2025: UBS
UBS global wealth management chief investment officer Mark Haefele believes that a Trump administration could further boost markets through potential corporate tax cuts and deregulation, especially in the energy and financial sectors.
Following Trump's victory, Haefele expects the S&P 500 to climb to 6,600 by the end of 2025, delivering nearly a 15% price return. This outlook is based on expectations of steady US growth, declining interest rates, and continued AI-driven gains.
"Trump’s win could lead to heightened fears about the impact of tariffs on earnings for hardware and semiconductor companies," Haefele wrote, "(b)ut we do not believe this will outweigh the structural growth story over the medium term."
Key sectors UBS finds attractive include technology, utilities, and financials. In technology, while Trump’s election could spark concerns over tariffs impacting hardware and semiconductor firms, UBS believes the sector's structural growth will prevail, particularly due to robust AI infrastructure spending and ongoing semiconductor demand.
For utilities, UBS sees renewable companies potentially facing challenges under Trump but anticipates strong overall demand due to corporate decarbonization targets and rising power needs from AI data centers.
12:15pm: Trump’s victory boosts markets
US stocks continued to surge on Wednesday following Donald Trump's victory in the presidential election, with the Associated Press calling Wisconsin for Trump, securing his return to the White House.
The Dow Jones Industrial Average rose 3.2%, or over 1,300 points, while the S&P 500 gained 2.1% and the Nasdaq Composite climbed 2.4% by midday.
The 10-year Treasury yield increased to 4.46%, and both Bitcoin and the dollar surged, reflecting optimism in the "Trump trade."
Republicans also flipped the Senate, although control of the House remains uncertain. Regional banks rallied, with the S&P Regional Banking ETF jumping over 11%, and the Russell 2000 rose 4.8%.
Tesla saw a 14% increase in stock value, benefiting from CEO Elon Musk's support for Trump.
11:20am: Small caps get a boost
The Russell 2000 index surged over 4% higher after Donald Trump was confirmed as the winner of the US presidential election.
In early trading Wednesday, the index of small and mid-cap stocks rose 94 points or 4.15% to 2,354.7.
As a domestically-focused index, the Russell 2000 outperformed the more international indexes such as the S&P 500, Nasdaq Composite and Dow Jones, which rose 1.7%, 1.9% and 3% respectively.
The Russell 2000 is a good play for those looking to invest in small US companies that are benefiting from the current economic conditions without much concern for global economic issues, Finalto's Neil Wilson noted.
Wilson writes that "lots of banks (which are doing very well today on deregulation and steeper yield curves…reflationary, cyclical) and its domestic focused so is a play on fiscal largesse and is a lot less worried about global outlook: it’s a pure ‘buy US’ trade right there."
9.53am: Wall Street rallies at open
Wall Street rallied as trading got underway following confirmation of Donald Trump’s win in the US presidential election.
The Dow Jones added 1,274 points, or just over 3% as trading got underway, while the S&P 500 and Nasdaq gained 2.1% each respectively.
News of Trump’s victory sent shares in the likes of banks and construction firms higher as investors looked to the former president’s tax-cutting and building-boosting plans.
Goldman Sachs gained 10.4% as the market opened, while Caterpillar Inc (NYSE:CAT, ETR:CAT1) and JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) were among a score of companies to enjoy gains.
Tesla Inc (NASDAQ:TSLA) shares soared 14.3% in the meantime, on speculation Elon Musk’s vocal support during Trump’s campaign would see his electric vehicle firm reap the rewards.
“Markets are faced with the prospect of an unrestricted period of leadership that many had pencilled in as the best-case scenario for equities,” Scope Markets analyst Joshua Mahony said.
“In particular, the focus on traditional industries such as US manufacturing and energy provide the basis for a redistribution of US economic strength after a period where tech has been the only show in town.”
Renewable energy firms Orsted and Vestas emerged as losers on the back of Trump’s win though, falling 14.2% and 13.1% in New York early on, given the president-elect’s previous opposition against offshore wind.
8.45am: Trump Trade 'fully unleashed'
The so-called Trump Trade, based on expectations that a return for the former president would see tariffs, tax cuts and deregulation boosting US growth and inflation, was "fully unleashed" in the market this morning across stocks, bonds, FX and crypto, says Jane Foley, senior FX strategist at Rabobank.
"Over the coming weeks and months the outlook will become more nuanced as the market weighs up each of the issues of the Trump agenda."
The market is then likely to take a lead from Trump’s choice of senior advisors, Foley said, which could influence the actual size of the tariffs.
On the assumption that the second Trump administration will move to increase some tariffs relatively quickly, Foley said "the Fed’s easing cycle could be over early next year as policymakers react to the inflationary implications of tariffs".
A rapid push against immigration could also heighten inflation concerns relatively quickly next year, she added.
The US dollar surged across the board this morning, rising 2.1% against the euro, 1.3% versus the British pound, 1.7% on the Japanese yen and 1% on China's yuan.
EURUSD's sharper fall reflects the "uncomfortable array of issues for Europe" around tariffs, defence and Ukraine, said Foley.
"That said, while the market is familiar with the broad outline of a Trump presidency, a huge amount of uncertainty remains on the size and extent of his policies," said Foley.
"An even greater amount of uncertainty pertains to the international impact of Trump’s agenda and then on the possible policy responses of governments and major central banks around the world.
"In reflection of the huge range of uncertainties, the USD’s rally this morning is already showing signs of fatigue."
7.33am: Wall Street to jump as Trump win confirmed
Wall Street was on course to rally after Donald Trump was confirmed as having beaten Kamala Harris in the race to the White House on Wednesday morning.
Futures had the Dow Jones up 2.9%, or 1,244 points, at 43,625 ahead of Wednesday’s opening bell. The S&P 500 looked on course to surge by 2.1% in the meantime, as the Nasdaq was seen 1.4% higher.
Trump had secured 277 electoral votes as of Wednesday morning, taking the former president past the required 270 mark to claim victory.
The Republicans also won the Senate off the Democrats, leaving the door open for Trump to press ahead with plans without much resistance, City Index analyst Fawad Razaqzada noted.
“Trump is seen as business-friendly and will be able to pass on his tax cuts through easily,” Razaqzada said, adding this was set to prompt Wednesday’s rally on Wall Street.
Bonds faced a hefty sell-off ahead of New York’s open on Wednesday morning though, with the yield on 10-year US treasuries surging 20 basis points to 4.47%.
The dollar index also rallied by 1.6% against foreign currencies, while Bitcoin jumped 7.5%.
“It is also worth keeping an eye on rising bond yields, which could negatively impact sentiment,” Razaqzada continued.
“[Trump’s presidency] could boost inflationary pressures and result in a slower pace of rate cuts from the Fed relative to other central banks.
“It could even prevent the Fed from cutting rates significantly in 2025 should the disinflation process stops and reverses. This is why the US dollar has rallied.”