Global markets responded with dramatic shifts Wednesday morning as Donald Trump secured victory in the presidential election, with investors rushing to position themselves for the policies expected in his second term.
Stock futures showed strong gains across the board, with S&P 500 futures rising more than 2% and Dow futures climbing nearly 3%. The Russell 2000 index of small companies, typically most sensitive to economic changes, surged almost 6% in futures trading.
Bitcoin soared to record highs near $75,000, while the benchmark 10-year Treasury yield climbed to 4.4% as investors dumped bonds. The cryptocurrency's rise reflected Trump's campaign promise to make the U.S. "the crypto capital of the planet" and establish a "strategic bitcoin reserve."
Trump-linked companies also saw immediate benefits, with Trump Media & Technology –the parent of Truth Social– jumping more than 40% in premarket trading. Tesla, led by Trump ally Elon Musk, rose 10%. Major banks, potentially facing lighter regulation, also gained, with JPMorgan up 7.5%.
International markets felt the impact of Trump's victory. The Mexican peso tumbled 2.5% to its lowest level this year amid concerns about potential 200% tariffs on Mexican vehicles. The Chinese yuan fell 1% against the dollar as markets priced in possible 60% tariffs on Chinese goods.
Companies tied to renewable energy faced pressure, particularly in South Korea. EV battery makers LG Energy Solution and its competitors fell roughly 7%, while solar panel maker Hanwha Solutions dropped more than 8%, reflecting expectations that Trump will break from current clean energy policies.
Market volatility eased as Trump's victory became clear early in the night. The VIX, known as Wall Street's fear gauge, fell to its lowest level since late September.
According to economists, while tax cuts and regulatory rollbacks could boost corporate profits, higher tariffs and stricter immigration enforcement might slow economic growth and raise consumer prices.
The federal deficit remains a key concern, with Trump's tax-heavy policies expected to increase government borrowing needs.
The S&P 500's strong performance this year, up 21%, puts it on track for its best showing in a presidential election year since 1936, when Franklin Roosevelt occupied the White House. Exciting times, indeed!
*Market data as of November 6, 2024, 6:30 am ET*
The Washington Post contributed to this article.
