Donald Trump has triumphed in the 2024 Presidential Election, securing a second term in office and defeating Democratic challenger Kamala Harris. The victory, declared by the Associated Press, sent shockwaves through global markets, triggering a surge in stock prices across the board.
In his victory speech, Trump expressed gratitude for the support of his running mate JD Vance and tech mogul Elon Musk, calling his win a testament to “the greatest political movement.” He vowed to “fix everything about our country,” signaling a continuation of his ambitious agenda.
The news of Trump’s victory sent U.S. markets skyrocketing on Tuesday, November 5th. The Dow Jones Industrial Average closed at 42,221.88, marking a 1.02% gain. The S&P 500 rose by a more substantial 1.23%, ending the day at 5,782.76. Meanwhile, the Nasdaq Composite climbed 1.43% to finish at 18,439.17.
While these gains were fueled by optimism surrounding Trump’s victory, a sense of uncertainty also permeated the markets. Investors are now carefully assessing the potential economic and geopolitical implications of Trump’s second term, particularly concerning trade and technology relations with China. This uncertainty is likely to fuel volatility in both bond and currency markets.
Further adding to the economic picture, the September U.S. trade deficit expanded to a staggering $84.4 billion, its highest level since April 2022. This figure exceeded market expectations of $84.1 billion. However, the ISM services PMI climbed to 56 in October, indicating strong growth in the services sector and reaching its highest level since August 2022.
The ripple effects of Trump’s victory extended beyond U.S. borders, impacting global markets as well. Asian markets opened the day with a mix of gains and losses. Japan’s Nikkei 225 soared by 2.16%, closing at 39,428.50, while Australia’s S&P/ASX 200 rose by 0.83% to end the day at 8,199.50. India’s Nifty 50 also traded higher, gaining 1.16% to reach 24,493.90. However, Chinese markets saw a downturn, with the Shanghai Composite declining 0.09% to close at 3,383.81 and the Shenzhen CSI 300 sliding 0.50% to end the day at 4,024.28. Hong Kong’s Hang Seng also experienced a significant drop, falling 2.23% to close at 20,538.38.
The decline in Chinese markets was largely attributed to concerns about renewed trade and technology tensions with the United States under Trump’s leadership. Investors are cautiously hedging against potential tariffs and sanctions that could impact Chinese assets.
In Europe, markets opened positively. The European STOXX 50 index rose by 1.06%, Germany’s DAX gained 1.18%, France’s CAC climbed 1.75%, and the UK’s FTSE 100 index traded higher by 1.42%.
Meanwhile, the commodities market experienced a mixed response. Crude Oil WTI and Brent both traded lower, dropping by 1.17% and 1.28% respectively. This decline was attributed to the dollar’s surge following Trump’s election win and a larger-than-expected rise in U.S. crude stock. However, Natural Gas saw a slight gain of 0.11%, reaching $2.673.
Precious metals also saw a drop, with gold falling by 0.55% to $2,734.40. Silver followed suit, declining by 1.30% to $32.350, and copper slipped by 2.68% to $4.3558.
U.S. futures markets also reflected the market’s optimism, with Dow futures climbing by 2.87%, S&P 500 futures rising by 2.29%, and Nasdaq 100 futures gaining 1.75%. The U.S. dollar index surged by 1.38% to reach 104.85, with the USD/JPY rising by 1.58% to 154.10 and the USD/AUD gaining 0.74% to 1.5176.
The surge in U.S. and European stock futures, the dollar, and bitcoin following Trump’s victory suggests investor confidence and a potential increase in inflation. This optimism has also led to a rise in Treasury yields.
The 2024 election has brought a sense of both excitement and uncertainty to global markets. While investors celebrate the market gains, concerns about Trump’s second term, particularly its potential impact on international trade and technology relations, are likely to cast a shadow over the coming months.
