US election results: Dow jumps 1,500 points

US election results: Following Republican nominee Donald Trump’s victory in the presidential election and his confirmation for a second term in the White House following a four-year break, benchmark indexes on Wall Street reached all-time highs on Wednesday.

Following the Trump victory, all three benchmark indexes reached their highest points ever. The Dow Jones ended at the 44,000 level after rising more than 1,500 points, or 3.5%. Since November 2022, this was the index’s greatest one-day increase.

With a 2.5% rise to finish close to 6,000, the S&P 500 had its biggest post-election trading day ever. The Nasdaq Composite also jumped 3%, driven by a 15% increase in Tesla shares, to finish close to the 19,000 mark, while the S&P 500 recorded its 48th record high for 2024.

The Russell 2000, a measure of mid- and small-cap stocks, closed at a 52-week high after rising by about 6%. Analysts predict that under Trump, midcap and smallcap companies would do better since they are more domestic focused and in line with Trump’s America-first goals.

The yield on the US 10-year increased 17 basis points to 4.44%. With the euro down 1.8% and the yen leading major currency losses, a dollar indicator up 1.3%. After falling as much as 3.5%, the Mexican peso was almost flat. After Trump adopted digital assets throughout his campaign, many saw Bitcoin as a “Trump trade,” and it reached a record high. Pressure on commodities caused copper and gold to plummet. Oil somewhat decreased.

“We got certainty that the market craves, which is the biggest takeaway from last night,” Ryan Grabinski of Strategas said. “Business and consumer confidence will both increase as a result. The focus should now turn to tomorrow’s Fed meeting. The 10-year is getting close to the 4.5% mark, which is the point at which risky assets had some difficulties over the previous 24 months.

The rise is being fueled by purchase signals for rules-based investment funds, which are being triggered by the stock market boom unleashed by Trump’s election triumph.

In a letter to clients on Wednesday, Scott Rubner, a tactical expert at Goldman Sachs Group Inc., said that the year-end rally may be bigger than investors had anticipated. The rally begins today.

According to a Nomura research, volatility-controlled funds are anticipated to purchase $50 billion worth of US equities in the next month and $110 billion through January.

According to Chris Senyek of Wolfe Research, he is still optimistic about equities as the year draws to a close.

“We think that markets will strongly favor financials, US-based industrials (transports), energy, and cryptocurrency today and into the end of the year, given Donald Trump’s election to the 47th Presidency of the United States,” he said. We believe that semis perform better and more offensive tech performs better as well. Value, equal weight, small-cap, and year-to-date laggards are our style.

The US Federal Reserve and the conclusion of its policy meeting later tonight Indian time will be the main focus for the time being.

According to Yung-Yu Ma of BMO Wealth Management, “the Fed is still likely to cut by 25 basis points at Thursday’s meeting and likely to cut again in December.” As 2025 approaches, we think it’s feasible that, depending on the balance between growth and policy, we’ll only see two or three cuts for the year.