Attendees cheer as a screen shows a broadcast of former U.S. President and Republican presidential candidate Donald Trum's speech at his election party in Florida on November 6, 2024, at the Nevada GOP election watch party in Las Vegas, Nevada, November 6, 2024.
Ronda Churchill | Afp | Getty Images
This report comes from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open tells investors everything they need to know, no matter where they are. Do you like what you see? You can register here.
What you need to know today
Trump will be the 47th US President
According to NBC News, Republican presidential candidate Donald Trump will be elected the 47th President of the United States after his victory over Democratic candidate Kamala Harris. If Trump keeps his campaign promises, he will push through tax cuts, mass deportations and high tariffs on imports.
Multiple records are closed
All three major U.S. indexes jumped to hit all-time highs on Wednesday amid a broad market rally. The 10-year Treasury Department The yield rose 14 basis points to 4.43% as investors anticipate higher U.S. government spending and a possible rise in inflation. Europe Stoxx 600 The index fell 0.54%.
Tesla rises, solar stocks fall
Tesla Shares rose 14.8% as investors bet that Trump's entry into the White House would benefit major supporter and Tesla boss Elon Musk. However, solar stocks slumped on fears that Trump would cut solar tax credits.
Tailwind for crypto
Bitcoin rose as much as 10% overnight to $76,493.86, a new high for the cryptocurrency. Stocks of crypto companies like Coinbase And Microstrategy also burst. Crypto is on the rise as Trump has branded himself as a pro-crypto candidate.
[PRO] Why small caps are on the rise
The Russell 2000 rose 5.84%, its best daily performance in more than two years. While Trump's proposed corporate tax rate cuts are widely expected to boost equity markets overall, small-cap companies in particular will also benefit from a number of other factors related to a Trump presidency.
The end result
Donald Trump's victory in the US presidential election is giving risk assets a tailwind.
His support for “lower corporate tax rates, deregulation and industrial policies that favor domestic growth” could boost the economy, which in turn will boost stock prices, Marc Pinto, head of American equities at Janus Henderson Investors, wrote in a note.
Investors' expectations in this regard have already given the stock market a boost. In short, the Trump rally has begun.
Bank stocks jumped on expected looser regulation of the sector, with many posting double-digit gains.
So-called old car manufacturer stocks, like those from General Motors And fordTheir engines have been gutted by Trump's promises to roll back vehicle emissions standards and eliminate incentives for electric vehicles.
This is bad for EV companies, however Tesla is an exception. CEO Elon Musk has been a strong supporter of Trump, and investors seem to think that relationship could be beneficial for the company.
The Trump victory sent the most important US indices to new highs. The S&P 500 rose by 2.53%, the Dow Jones Industrial Average rose by 3.57% and the Nasdaq Composite advanced 2.95%.
Surely yesterday's commotion could have been as much a relief rally as a Trump rally.
“A decisive victory removes the hangover of an unclear or disputed outcome. And that alone removes some of the uncertainty and supports the strong reaction we are seeing in the markets,” said Angelo Kourkafas, senior investment strategist at Edward Jones.
So it's very likely that as emotions and anticipation fade, so will the rally.
Additionally, rising Treasury yields and potential universal tariffs are casting a shadow over markets, noted Yung-Yu Ma, chief investment officer of BMO Wealth Management.
For now, however, the Trump rally is causing a stir in the markets.
— CNBC's Jesse Pound, Scott Schnipper, Alex Harring, Yun Li and Jesse Pound contributed to this report.
Comments are closed.