Wall Street was awash in an ocean of green ink in the morning after President-elect Donald Trump decisively defeated Vice President Kamala Harris on election night.
In the post-election aftermath, the leading stock market indexes extended their overnight rally.
The blue-chip Dow Jones Industrial Average, for example, surged about 1,200 points, to above 43,000. The tech-heavy Nasdaq Composite Index advanced more than 300 points, while the benchmark S&P 500 Index picked up 2 percent.
Trump Media and Technology Group (TMTG), the parent company of the social media platform Truth Social, surged midweek. Shares, which trade under the ticker DJT, climbed 28 percent, to above $43. Year to date, the stock has risen more than 100 percent.
Trump is the dominant shareholder, and possesses nearly 115 million shares that are worth more than $5 billion, up from $3.9 billion prior to the presidential contest. In recent months, TMTG has served as a proxy for Trump’s electoral odds.
Tesla Motors, meanwhile, increased 12 percent because traders bet that Trump’s victory would benefit industrialist Elon Musk.
Trump has pledged that Musk will lead a new commission, the Department of Government Efficiency (DOGE), to combat “fraud and improper payments.”
Wedbush analyst Dan Ives believes that the electric vehicle titan could reach a market value of $1 trillion under a Trump presidency. The company’s market cap is nearly $800 billion.
Other sectors also benefited from Trump’s win.
Cryptocurrencies and crypto-related stocks registered sizable gains as investors welcomed the prospect of a lax regulatory climate for the industry. Trump has promised to establish a Bitcoin strategic reserve, fire Securities and Exchange Commission (SEC) chief Gary Gensler, and make the United States “the crypto capital of the planet.”
Bitcoin spiked to an all-time high of $75,000 in overnight trading.
Coinbase shares jumped close to 13 percent during the post-election trading session.
The banking sector posted significant gains as investors cheered on the possibility of a supportive regulatory environment under a second presidential term for the Republican.
Many financial institutions, including Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase, rose about 6 percent.
Clean energy stocks slipped on fears that Trump and Republican lawmakers will reverse the Inflation Reduction Act and the legislation’s plethora of tax credits, grants, and other subsidies for businesses and households to tackle climate change.
Shares of Enphase Energy, FirstSolar, Plug Power, and SunRun tumbled by double digits.
Stocks of discount retailers also recorded losses at the opening bell on concerns surrounding the president-elect’s plan to institute universal tariffs on all imports and a 60 percent levy on products arriving from China.
Dollar Tree, for example, slumped 4 percent while Five Below declined 8 percent.
The Dollar, Treasury Yields, and Commodities
The U.S. Dollar Index (DXY), a basket of six currencies (British sterling, Japanese yen, euro, Chinese yuan, Canadian dollar, Swedish krona, Swiss franc) weighted against the greenback, climbed as much as 2 percent. Year to date, the index has rallied nearly 4 percent.The buck’s meteoric ascent was fueled by investors resetting their expectations about economic growth, inflation, and Federal Reserve policy, said Adam Turnquist, the chief technical strategist for LPL Financial, in a note emailed to The Epoch Times.
Futures markets trimmed their interest-rate cut projections from five quarter-point reductions to four by the end of next year.
Fed officials of the policy-making Federal Open Market Committee (FOMC) will conclude their two-day meeting on Nov. 7. Investors overwhelmingly are expecting a rate cut of 25 basis points.
The dollar found further support, Turnquist said, from Treasury yields surging higher.
The benchmark 10-year yield firmed more than 18 basis points, inching closer to 4.48 percent. The 20- and 30-year yields also reached 4.76 percent and 4.65 percent, respectively.
“It’s no surprise bond yields are rising since the Fed seems committed to its rate-cutting campaign despite solid economic growth and nagging services inflation,” said Jeffrey Roach, the chief economist for LPL Financial, in a note viewed by The Epoch Times via email. “Markets are hedging bets that the Fed could make a policy mistake by reigniting inflationary pressures as consumers, especially the well-heeled millennials, support the economy.”
Recent trends are impacting dollar-denominated commodities like crude oil and gold. A stronger dollar can make it more expensive for foreign investors to purchase, and higher rates can influence the opportunity cost of holding non-yielding bullion.
West Texas Intermediate (WTI) crude oil futures tumbled more than 1 percent, to around $71 per barrel, on the New York Mercantile Exchange. Brent, a global benchmark for oil prices, also sank 1 percent, to below $75 a barrel, on London’s ICE Futures.
In addition to a higher dollar affecting prices, there is the expectation that Trump will reverse President Joe Biden’s energy policies and embrace a pro-energy regimen, said Phil Flynn, an energy strategist at The PRICE Futures Group.
“There’s that psychological impact that Trump is going to ‘drill, baby, drill’ with slashing regulations that were put in on by the Biden administration,“ Flynn told The Epoch Times. ”We’re going to go beyond all of those anti-fossil fuel policies.”
But while the United States leads worldwide crude output, Flynn said industry estimates suggest the country is underproducing by 1–2 million barrels a day, which is “where we would be” if Trump were in place.
December gold futures tanked around $70, or 2.55 percent, to below $2,680 per ounce on the COMEX division of the New York Mercantile Exchange. Silver prices cratered 4 percent, to $31.46 an ounce.
After notching an intraday record high of $2,800 last week, gold prices had flatlined heading into Election Day.
Gold plummeted on fears that the Fed could take a more conservative stance to easing monetary policy amid threats of rekindling the inflation flame, says Ole Hansen, the head of commodity strategy at Saxo Bank.
Ultimately, says economist Mohamed El-Erian, America’s fiscal situation over the next four years could be a factor for the financial markets to monitor.
