US Stocks Surge to Record Highs as Trump Returns to the White House

Trump-related stocks soar as Bitcoin reaches new peak amid market optimism.

On Wednesday, Wall Street’s primary indices reached record highs as Donald Trump reclaimed the U.S. presidency, marking a dramatic return to power four years after leaving office. Investors are anticipating favorable policies such as tax cuts, deregulation, and a president keen on influencing the markets and currency, though potential tariff increases might bring inflationary pressures and deficit challenges.

Trump’s victory triggered a surge in “Trump trades,” with U.S. Treasury yields rising and the dollar experiencing its biggest one-day gain since March 2020. Meanwhile, currencies like the euro, Chinese yuan, and Mexican peso faced losses. Trump’s pro-crypto stance also boosted bitcoin, sending it to an all-time high of $75,389, fueled by his campaign statements suggesting he might remove SEC Chairman Gary Gensler, who had targeted crypto firms.

The Dow jumped over 1,250 points, and the S&P 500 approached the significant 6,000 level. David Morrison, a senior market analyst at Trade Nation, noted relief over a quick, undisputed election result.

Small-cap stocks, represented by the Russell 2000, surged 4.1%, as domestic-oriented companies anticipated benefits from a relaxed regulatory and tax environment, along with protection from possible import tariffs. The VIX, a measure of market volatility, dropped nearly 5 points, hitting its lowest level since September, reflecting investor relief at the election outcome.

Sam Stovall, CFRA Research’s chief investment strategist, commented that potential stimulus measures and relaxed industry regulations could fuel a strong market rally through the end of the year.

Most sectors within the S&P 500 saw gains, with financials leading the way, up 5.1% as rising yields bolstered expectations of reduced regulation. Energy, industrials, and consumer discretionary sectors were also up over 2%, while rate-sensitive sectors like real estate and utilities declined.

Trump-linked stocks showed notable gains, with Trump Media & Technology Group climbing 16% and Tesla jumping 13.4%, as CEO Elon Musk publicly supported Trump during the campaign. Significant increases were also observed in stocks for cryptocurrency companies, energy firms, and prison operators, while renewable energy stocks lagged.

The Dow Jones industrial average gained 1,190 points (2.82%) to reach 43,412.81. The S&P 500 rose 93.73 points (1.62%) to 5,876.49, and the Nasdaq Composite increased by 312.049 points (1.69%) to 18,751.22.

Attention now shifts to the U.S. legislative branches, as Republicans aim to maintain their majority in the House following their success in the Senate. A unified government with control over the presidency, House, and Senate would give Trump a smoother path to enact his legislative agenda.

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