Investors surged into Trump-linked assets as Donald Trump secured a second term by winning Wisconsin and passing the 270-vote threshold early Wednesday.
“The ‘Trump trade’ is in full swing,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. “US yields are climbing on expectations of rising debt under a Trump presidency, Bitcoin hit a fresh record, and the dollar is rallying across the board.”
Trump’s lead in election results had already spurred investor confidence, anticipating policies around universal tariffs and tightened immigration, which are likely to drive inflation and market activity.
Market Movements in Response to Trump’s Victory:
Stock Futures Surge
Trump’s tax and regulatory policies are viewed as business-friendly, prompting a rally in stocks. S&P 500 futures climbed 2.3%, the Dow Jones futures hit record highs up 2.9%, and Nasdaq 100 futures rose 1.8%.
“Markets appreciate the clarity Trump’s win brings,” noted Neil Wilson, chief market analyst at Finalto. Michael Brown at Pepperstone added that the strong economy, solid Q3 earnings, and a Fed supportive of growth set up further gains as election uncertainty lifted.
European stocks mirrored the US surge: the FTSE 100 rose 1.3%, Germany’s DAX gained 1.3%, and France’s CAC40 was up 1.6%.
Trump Media and Tesla Shares Spike
Trump Media and Technology Group stock jumped as much as 62% in premarket trading, later stabilizing at a 29% increase. Meanwhile, Tesla rose 15%, with crypto-linked stocks MicroStrategy and Coinbase each climbing around 13%.
Treasury Yields Climb
The 10-year Treasury yield rose to 4.44%, while the two-year yield reached 4.25%, signaling expectations for higher inflation and wages under Trump. Bond markets showed strong reactions as investors saw Trump’s victory impacting economic policy more than the Fed’s likely rate cuts.
“Bond investors appear to be prioritizing Trump’s policies over Fed actions, despite expected rate cuts this week,” noted Kathleen Brooks, research director at XTB.
US Dollar Strengthens
The Bloomberg Dollar Spot Index rose 1.4%, reaching its highest gain in four years, with a 1.5% increase against the euro and yen, and a 2.5% jump against the Mexican peso. The dollar’s rise reflects expectations for Trump’s policies to sustain US economic outperformance and possibly prompt a tightening of Fed policy.
Small-Cap Stocks Rally
Russell 2000 futures climbed 6.5% as Trump’s protectionist policies are seen as especially favorable to domestically-focused small-cap stocks.
Bitcoin Hits Record High
Bitcoin spiked above $75,000, settling around $73,000. Trump’s pro-crypto stance fueled investor demand for cryptocurrencies as a hedge against inflation and dollar devaluation. “With Trump’s win, Bitcoin is primed for further gains,” said Naeem Aslam, CIO at Zaye Capital Markets.
Volatility Drops
The CBOE Volatility Index, a measure of market uncertainty, dropped nearly 30% after Trump’s victory became evident, signaling investor relief at a clear election outcome.
