The U.S. stock market experienced a dramatic surge on Wednesday following former President Donald Trump’s unexpected victory in the 2024 election, sending shockwaves through global markets. Futures for all three major indices, the Nasdaq 100, S&P 500, and Dow Jones, were strongly in the green, signaling bullish sentiment on Wall Street. This bullish sentiment was further validated by the pre-market trading performance of key stocks, with Trump’s social media company, Trump Media & Technology Group Corp., seeing a remarkable surge of over 33% and Tesla Inc., owned by his ally Elon Musk, gaining over 14%.
The Associated Press declared a Republican win in three out of seven key swing states: North Carolina, Pennsylvania, Georgia, and Wisconsin. While Michigan and Arizona remained in contention, early trends suggested a potential Trump victory in these states as well. The prospect of a Trump presidency fueled a sense of optimism regarding the U.S. economy, leading to a surge in various sectors, including tech stocks. The tech-heavy Nasdaq Composite closed Tuesday’s session on a positive note, while oil prices eased due to the expectation of a stronger U.S. dollar following Trump’s win.
The excitement wasn’t limited to stocks. Bitcoin, the leading cryptocurrency, soared to an unprecedented high of $75,000. While prices cooled slightly to $73,737, Bitcoin remained up over 7% within the last 24 hours. Analysts attributed this surge to a combination of factors, including the anticipation of pro-growth policies under a Trump presidency and the potential for increased institutional adoption of cryptocurrencies.
Veteran investor Mark Mobius, chairman of Mobius Emerging Opportunities Fund, expressed his confidence in the U.S. economy’s future under Trump’s leadership. “It looks like a Trump presidential win, but also a win for Republicans in House and Senate. If that happens, you’re going to see the U.S. economy really taking off,” he told CNBC. Ryan Detrick, chief market strategist at Carson Group, echoed this sentiment, stating, “Once we kind of get through the election uncertainty… we do think that could potentially be the springboard to a potential another strong November.” He emphasized the strength of the U.S. economy and the continuation of the bull market.
Stephen Dainton, President of Barclays Bank PLC and Head of Investment Bank Management, asserted that the markets had already factored in a Trump win, claiming, “The markets are now trading full-on Trump trade.” Furthermore, WisdomTree and Wharton School economist Jeremy Siegel shared a similar bullish outlook for the equity market, highlighting the role of resilient earnings and stable economic fundamentals in driving continued growth. However, he cautioned that bond markets might face increased volatility and higher yields.
On the economic data front, the U.S. trade deficit widened to $84.4 billion in September, reaching its highest level since April 2022 and exceeding market expectations. The ISM services PMI, a key indicator of economic activity in the service sector, climbed to 56 in October, marking its highest reading since August 2022. These figures suggest continued economic strength and potential for growth.
While Wednesday’s economic calendar featured limited data releases, key companies are scheduled to report earnings, including CVS Health Corporation, Johnson Controls International Plc., and Qualcomm Inc. Investors are closely watching these reports for insights into the health of various sectors and their potential for continued growth.
The broader market reaction to Trump’s victory highlighted the strong anticipation of potential economic benefits under his leadership. While uncertainties remain, analysts are generally optimistic about the prospects for U.S. equities, particularly in the short term. It remains to be seen how these trends will play out in the long term, but the immediate impact on the markets suggests a significant shift in investor sentiment.
