Stocks, bitcoin soar after Trump’s victory, while inflation worries rise; Dow surges 1,500
However, concerns about inflation and higher interest rates emerged, leading to a decline in Treasury bond prices and European stock markets
The US stock market, Elon Musk’s Tesla, banks and bitcoin all stormed higher Wednesday as investors made bets on what Donald Trump’s return to the White House will mean for the economy and the world. Among the losers the market sees: the renewable-energy industry and potentially anyone worried about higher inflation.
The S&P 500 rallied 2.5 per cent for its best day in nearly two years. The Dow Jones Industrial Average surged 1,508 points, or 3.6 per cent, while the Nasdaq composite jumped 3 per cent. All three indices topped records they had set in recent weeks.
The US stock market has historically tended to rise regardless of which party wins the White House, with Democrats scoring bigger average gains since 1945.
But Republican control could mean big shifts in the winning and losing industries underneath the surface, and investors are adding to bets built earlier on what the higher tariffs, lower tax rates and lighter regulation that Trump favours will mean.
“The markets are scrambling to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook,” Peter Esho of Esho Capital said.
Of course, how much change Trump effects in his second term is likely to depend on whether his fellow Republicans win control of Congress, and that is still to be determined. That could leave room for snaps back in some of Wednesday’s big knee-jerk movements.
