Futures on the Dow jumped more than 800 points, up 2%, while S&P 500 futures jumped around 1.7% and Nasdaq 100 futures climbed 1.6% as Donald Trump closed in on victory early Wednesday morning. Futures for the small cap benchmark Russell 2000, also a projected Trump beneficiary, rallied more than 5% as of 3:40AM Eastern.
At the same time, the US dollar index hit its highest point since July, rallying against other global currencies.
“With the Republican party on the cusp of a clean sweep of Congress and the presidency, US markets are rallying. This is less an endorsement of every facet of the Republican manifesto, but because markets like visibility, and clear governmental control provides that”, says Michael Field, European market strategist at Morningstar.
In his first speech, Donald Trump thanked supporters for being elected as the 47th president, claiming to have won both the popular vote and an Electoral College with more than 300 votes. Cryptocurrencies, which are considered part of the so-called Trump trade, rallied as well. Bitcoin surpassed $75,000, topping its previous all-time peak reached in March. Donald Trump has voiced his support of cryptocurrencies in the past.
The 10-year Treasury yield surged to around 4.43% on speculation Trump’s proposed tax cuts and other spending plans would increase the fiscal deficit, while possible tariffs could reignite inflation.
European stocks in the Stoxx 600 index opened about 1% higher, though renewable energy stocks declined sharply, with wind giants Vestas VWS and Orsted ORSTED both down about 8%. Ozempic maker Novo Nordisk NOVO B, which has a large revenue exposure to the US market, jumped 8% at the open.
In Asia the picture is divided, with Tokyo’s Nikkei 225 climbing around 2% higher while Hong Kong’s Hang Seng slipped around 2.5%.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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