LONDON: As the globe prepares for another Donald Trump presidency, Wall Street surged into record territory, the dollar surged, and bitcoin reached a new high on Wednesday.
Four years after losing the White House to Joe Biden, the Republican nominee made a dramatic political comeback by defeating Vice President Kamala Harris.
While the S&P 500 and Nasdaq Composite surged about two percent, the Dow surged three percent.
According to Fawad Razaqzada, an analyst with City Index and FOREX.com, “the reason for the surge in the US stock market is that Trump is perceived as business-friendly and will be able to pass his tax cuts through easily without much resistance from the Democrats who have lost control of the Senate.”
Tesla and Trump Media’s stock values rise
Trump’s proposals, “which feature lower tax rates and deregulation among the cornerstones, are being heralded by the stock market as pro-growth policies that will be a boon for corporate profit growth,” according to Patrick O’Hare, an analyst with Briefing.com.
According to Jason Schenker of Prestige Economics, the markets are also praising Tuesday’s outcomes for their clarity.
However, European stock indexes gave up significant previous gains to turn negative, indicating that investors are similarly concerned about the effects of Trump’s protectionist measures. Shares of automakers, a potential target of Trump tariffs, plummeted, causing Frankfurt to drop 1.1%.
Expectations that Trump would put taxes on Chinese goods caused Chinese equities to plummet, causing Asian stocks to diverge.
Despite being beneficial for corporate earnings, Trump’s tax cuts are viewed as inflationary, which means the Fed will be lowering interest rates less frequently in the months to come.
As a result, the dollar gained ground against its primary competitors, rising about 2% versus the euro.
On Thursday, the Fed will make its most recent rate announcement.
“There is a high expectation that a Trump presidency will result in fewer regulations on big tech and big finance,” she continued.
Tesla’s stock shot up 13 percent after Trump called Elon Musk, the company’s CEO and a major campaign supporter, a “star” in his victory address.
The former president owns the majority of Trump Media & Technology Group, which saw a roughly 30% increase in value. Their value has almost tripled since they fell to their lowest points ever recorded in late September. At last, his investment was worth almost $5 billion.
The Bitcoin record
At a new high of $75,371.67, Bitcoin surged $6,000 higher than its previous peak of about $74,000 in March.
Trump has vowed to assign tech entrepreneur Elon Musk to lead a comprehensive audit of government waste and to turn the US into the “bitcoin and cryptocurrency capital of the world.”
