U.S. markets hit record highs as Trump declared victory in the election, sending stocks, bitcoin, and the dollar soaring while Treasury yields jumped.
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| Following Trump's election win claim, U.S. stocks and bitcoin surged, fueled by hopes for pro-business policies and a Republican-led Congress. Image: Collected |
Washington, USA --- November 6, 2024:
Markets surged and assets shifted dramatically following former President Donald Trump's claim of victory in the historic and closely contested U.S. presidential election. With the Republicans also winning control of at least one chamber of Congress, investors flocked to the dollar, bitcoin, and stocks while selling off U.S. Treasury bonds in anticipation of the economic policies that could follow a Trump presidency.
U.S. stock futures hit all-time highs, the dollar surged, and Treasury yields jumped. In a significant move, bitcoin soared past $75,000 for the first time, as investors placed bets on a future with looser cryptocurrency regulations under Trump. "Not only are markets positioning themselves for a Trump victory in the electoral college, but the prospect of a Republican-controlled Congress has added fuel to the optimism," said Matthew Ryan, head of market strategy at Ebury.
Trump's lead in key swing states like North Carolina and Georgia, alongside his projected victory by Fox News, underscored the market's positive sentiment toward policies that favor lower taxes, deregulation, and a more protectionist trade stance. As Republicans secured control of the U.S. Senate, expectations of tax cuts, deregulation, and tariff hikes drove a surge in certain assets, especially those likely to benefit from these policies.
"The market expects Trump to cut taxes or at least keep rates low, and with a potential 'red sweep' of the White House and Congress, further cuts seem likely," said Ken Peng, head of Asia investment strategy at Citi Wealth. Investors also viewed deregulation positively, particularly for the financial, energy, and tech sectors.
Bank stocks outperformed in Asia, with shares in Tokyo rising by 4.4%, and Treasury yields flirted with 4.5%. However, the Mexican peso, which could be hit by Trump's tariff policies, fell to a two-year low, and the euro slid towards its largest single-day drop since 2020.
Global markets braced for potential volatility, with the Hang Seng index in Hong Kong dropping 2.7%, as traders feared broader trade conflicts, particularly in China. "With Trump in office, market volatility is likely to pick up," said Rong Ren Goh, portfolio manager at Eastspring Investments in Singapore.
Shares of companies closely linked to Trump’s business ventures also saw significant gains. Tesla, led by Trump supporter Elon Musk, rallied sharply in Frankfurt, while Trump Media and Technology Group’s stock surged by 10% in extended trading.
Despite the optimism surrounding Trump’s victory, some analysts and investors expressed caution, noting that the election results could lead to unpredictable volatility in the weeks to come. "Right now, markets are focused narrowly on the prospect of tariffs because it is the easiest lever to pull, but broader trade conflicts are also possible," said Goh.
As the election results continued to unfold, investors remained on edge, tracking every development closely, anticipating a bumpy road ahead.