Stocks and other financial assets are increasing was after Donald Trump presented as the winner US presidential election and the Republican Party gained control of the Senate.
The Dow Jones Industrial Average rose more than 1,200 points, or nearly 3%, in early trading Wednesday, while the broader S&P 500 and the tech-heavy Nasdaq Composite each rose more than 2%.
Many investors expect Trump's victory Promote faster economic growth and more market-friendly policies.
“The market is struggling to figure out what will happen next, but at the moment, the market is pricing in the outlook for higher growth and higher inflation,” said Peter Esho of Esho Capital.
Bitcoin's price jumped nearly 8% to a record $75,345 before easing slightly. Trump promised support for cryptocurrencies during the campaign. Shares of crypto exchange Coinbase rose 18% and led nearly all cryptocurrencies, including Dogecoin, which jumped 17%.
Bank stocks, which could benefit from less restrictive rules, rose in premarket trading. JPMorgan, the world's largest bank by assets, gained about 7%. Capital One rose 11.3%.
Tesla jumped nearly 13% under the leadership of Trump supporter Elon Musk. According to Wedbush analyst Dan Ives, the company's size gives it a major advantage in the electric vehicle market if, as expected, Trump eliminates rebates and tax incentives for electric vehicles. Shares of Tesla's competitors fell massively.
Trump could undo some of the Biden administration's efforts to fight climate change. Renewable energy stocks like First Solar and Enphase fell by double-digits in premarket trading. First Solar has been a big beneficiary of the Biden administration's Inflation Reduction Act.
Ryan Sweet, chief U.S. economist at Oxford Economics, expects the Republican-led Congress to extend the individual tax cuts first passed in 2017 during the Trump administration, as well as increase federal spending. Sweet told investors in a report that President-elect Trump “is also likely to use his presidential powers to reduce immigration and impose targeted tariffs on China, Mexico, Canada and the European Union.”
Trump has vowed to sharply increase tariffs on imports from China and other countries, worsening the outlook for Chinese exporters at a time when Beijing is ramping up manufacturing to try to revive its slowing economy. Have trusted too much.
Trump Media & Technology Group, the company behind the former president's Truth social platform, surged 36% overnight as it became increasingly clear that Trump was returning to the highest elected office in America.
Matthew Ryan, head of global markets strategy, said: “Without a doubt, we see a clear consensus among investors that President Trump will usher in a Federal Reserve rate hike, weaker global growth and more geopolitical uncertainty, all of which are underpinning for the dollar. There is momentum for this.” Financial services firm Ebury.
Regardless of which party wins the White House, the broader U.S. stock market has historically tended to rise, even though each party's policies can help and hurt the profits of different industries.
The S&P 500 has risen nearly 70% since the 2020 election brought President Joe Biden into office. The record growth came as the US economy recovered from the COVID-19 pandemic and managed to avoid recession despite a surge in inflation.
The economy was a key issue for inflation-weary American voters who elected Trump this time, although mainstream economists have said Trump's policy proposals would make inflation worse.
Contributed to this report.