NEW YORK/LONDON, Nov 6 (Reuters) – Wall Street tore to record highs on Wednesday and major stock markets around the world surged, while bitcoin hit an all-time-high and the dollar was set for its biggest one-day jump in four years after Donald Trump was elected U.S. president.
Trump’s decisive victory pummelled long-dated Treasuries and revived the “Trump trade,” as yields rose in anticipation that Trump will hike tariffs as he has promised, increasing the U.S. deficit and inflation and causing the Federal Reserve to cut interest rates by less than it otherwise would have.
Trump, 78, recaptured the White House in Tuesday’s election with resolute support, despite news reports and polls that said it was a closely contested election.
“The fact that he won so handily, and it was called so quickly, I think that was a bit of a shock to the market,” said Paula Comings, head of foreign exchange sales at U.S. Bank. “We have seen now massive rallies in risk assets.”
The VIX, a measure of stocks’ volatility also perceived as “Wall Street’s fear gauge,” dived 21% as investors celebrated in part the clarity of the election outcome.
The S&P 500 Index (.SPX), opens new tab jumped 2.5%, the Dow Jones Industrial Average surged 3.6%, and the Nasdaq Composite leapt 3%. All three indexes hit record highs on Wednesday. The MSCI index for world stocks (.MIWD00000PUS), opens new tab rose 1.3%.
Shares in electric car maker Tesla (TSLA.O), opens new tab leapt 15% after Elon Musk, its billionaire CEO, emerged as one of Trump’s key supporters in the final leg of his 2024 campaign.
Investors appeared to bet on Tesla’s benefiting from Musk’s ties with Trump, who has said he would create a government efficiency commission headed by Musk to cut federal spending.
Shares in Trump’s social media company, Trump Media & Technology Group (DJT.O), opens new tab, gained 5.9% to $35.96 after surging as much as 42% overnight. The stock has approximately halved in value since hitting a record high in March.
The dollar index rallied 1.7% and was set for its best day since March 2020.
Outside the United States, investors were decidedly less euphoric, weighed by concerns that higher tariffs under Trump would hurt global trade and economic growth.
The euro extended losses by a touch late in the day after German Chancellor Olaf Scholz sacked his finance minister, and said he will hold a parliamentary confidence vote in the government in January, triggering political chaos in Europe’s largest economy.
Comments are closed.