The stock market experienced a significant surge on Wednesday following Donald Trump’s victory in the presidential election. All three major U.S. indexes reached new record levels, with the Dow Jones Industrial Average jumping as much as 3.5%, the S&P 500 soaring 2.3%, and the Nasdaq rising 2.7%. This marked the Dow’s largest point gain since April 2020 and percentage advance since November 2022, the S&P’s steepest percentage jump since November 2022, and the Nasdaq’s since August. The Russell 2000, which tracks smaller companies, also saw a 5% rally, its best performance since November 2023.
Among the sectors that saw significant gains were financials, energy, and industrials, with each experiencing a boost of 4-6%. This aligns with expectations that Trump’s promises of deregulation would benefit these industries. Stocks of companies like Goldman Sachs, Nvidia, Bank of America, and Tesla reached all-time highs, while others like Wells Fargo, Goldman Sachs, Morgan Stanley, and JPMorgan Chase saw their shares increase by at least 11%. Overall, ten of the S&P’s 13 sectors saw gains on Wednesday.
Notable companies that reached their highest share prices in at least 12 months included Amazon, American Express, Bank of America, Goldman Sachs, Tesla, Walmart, and others. Tesla CEO Elon Musk, Oracle chairman Larry Ellison, Berkshire Hathaway CEO Warren Buffett, Amazon founder Jeff Bezos, and Nvidia CEO Jensen Huang were among the biggest net worth winners on Wednesday, according to Forbes’ real-time billionaires tracker.
UBS strategists noted that the surge in U.S. equity indexes following the election was driven by anticipation of stronger domestic growth, increased mergers and acquisitions activity, an extension to personal tax cuts, and hopes of lower corporate taxes. The prospect of a clear-cut election outcome may have also contributed to the market’s positive reaction. In other financial market developments, bitcoin hit its highest price ever, the dollar saw a significant jump, and yields for the 10-year U.S. government bond rose to a four-month high.
Overall, the stock market reaction to Donald Trump’s victory in the presidential election was overwhelmingly positive, with multiple major milestones being reached on Wednesday. Investors responded favorably to the prospects of a Trump administration and its potential impact on various industries, leading to a widespread surge in stock prices and record highs for key indexes. The market rally was also reflected in the performance of individual stocks, as well as the net worth gains for prominent billionaires. The positive sentiment extended to other financial markets as well, with bitcoin, the dollar, and bond yields all experiencing significant movements in response to the election results.
