Current:Home > NewsStocks surge to record highs as Trump returns to presidency-InfoLens
Stocks surge to record highs as Trump returns to presidency
View Date:2024-12-23 11:57:45
- All three major indexes hit record highs
- Trump-linked stocks, Tesla jump
- Market volatility gauge falls sharply
- Shares of small-cap companies soar
NEW YORK — U.S. stocks rallied sharply to close at record highs on Wednesday after Republican Donald Trump won the 2024 U.S. presidential election in a stunning comeback four years after being voted out of the White House.
The Dow Industrials, S&P 500 and Nasdaq Composite each ended at record levels with investors expecting lower taxes, deregulation and a U.S. president who is not shy to weigh in on everything from the stock market to the dollar, although fresh tariffs could bring challenges in the form of a higher deficit and inflation.
The Republican's win powered a rally in so-called "Trump trades," sending U.S. Treasury yields sharply higher, with the benchmark 10-year note yield hitting a four-month high of 4.479%. Bitcoin hit a record high of over $75,000 and the dollar was on track for its biggest one-day percentage gain since September 2022.
Polls indicated a very tight race, with some concern the process could be drawn out before a victor was declared.
"Investors were kind of portfolio jockeying to score up some of their risk exposure in anticipation of an outcome that was going into it, seemingly a toss-up," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
Invest wisely: Best online brokers
More:Lock in a mortgage rate after the Fed cuts? This might be your last chance
"And obviously, it turned very quickly and led to a very much risk-on day today in which anything that isn't tied to the ground from a cyclical or pro-growth standpoint is absolutely launching."
According to preliminary data, the S&P 500 gained 145.04 points, or 2.51%, to end at 5,927.80 points, while the Nasdaq Composite gained 539.48 points, or 2.93%, to 18,978.65. The Dow Jones Industrial Average rose 1,504.51 points, or 3.56%, to 43,726.39.
Both the Dow and S&P 500 registered their biggest one-day percentage gains since November 2022.
More:Who are the billionaires, business leaders who might shape a second Trump presidency?
Financials jumped as the best performing of the 11 major S&P 500 sectors. Banks, expected to benefit from loosening regulations under Trump, powered the gains, with the S&P 500 bank index up about 10%, its biggest daily jump in two years.
The small-cap Russell 2000 rallied to a three-year high, with the domestically concentrated stocks seen as likely to benefit from easier regulations, lower taxes and less exposure to import tariffs. However, rising Treasury yields could hurt smaller companies, which tend to rely heavily on borrowing and are more sensitive to higher interest rates.
"This move up in interest rates ... if it doesn't stall out here somewhere around this 4.4%, 4.5% level or so, and we start to retest those levels we saw last October of 5%, that could not only put small caps, but the market itself on its heels," said Luschini.
The CBOE Volatility Index, also known as Wall Street's "Fear Gauge," dropped fell to a six-week low of 15.44.
The rate-sensitive real estate and utilities sectors were among the day's few decliners as investors assessed the chances of Trump's policies boosting inflation and altering the Federal Reserve's path of interest rates, which has been a key component of Wall Street's recent rally.
The central bank is widely expected to ease the benchmark interest rate by 25 basis points at its policy-setting meeting ending on Thursday. However, traders have begun to trim bets for a cut in December and the number of reductions expected next year, according to CME's FedWatch Tool.
Stocks viewed as likely to perform well under a second Trump term also advanced, with Trump Media & Technology Group in very volatile trading while Tesla leapt as CEO Elon Musk has supported Trump in his electoral campaign.
Strong gains were also made by shares of cryptocurrency companies, energy firms and prison operators, while renewable energy shares fell.
Markets were also eyeing whether the Republican Party could maintain a majority in the House of Representatives after gaining control of the U.S. Senate, which would lead to less opposition to a Trump agenda.
Reporting by Chuck Mikolajczak; Editing by Richard Chang
(This story has been updated with new information.)
veryGood! (25162)
Related
- The Stanley x LoveShackFancy Collaboration That Sold Out in Minutes Is Back for Part 2—Don’t Miss Out!
- 'There is no tomorrow': Young Orioles know the deal as Rangers put them in 2-0 ALDS hole
- California Gov. Gavin Newsom vetoes bill aimed at limiting the price of insulin
- Powerful earthquakes kill at least 2,000 in Afghanistan
- Glen Powell responds to rumor that he could replace Tom Cruise in 'Mission: Impossible'
- Rebecca Loos Reacts to Nasty Comments Amid Resurfaced David Beckham Affair Allegations
- WNBA star Candace Parker 'nervous' to reintroduce herself in new documentary: 'It's scary'
- Videos of 'flash mob' thefts are everywhere, but are the incidents increasing?
- Jennifer Lopez Gets Loud in Her First Onstage Appearance Amid Ben Affleck Divorce
- What was the Yom Kippur War? Why Saturday surprise attack on Israel is reminiscent of 1973
Ranking
- Historian Doris Kearns Goodwin to kick off fundraising effort for Ohio women’s suffrage monument
- Carlos Correa stars against former team as Twins beat Astros in Game 2 to tie ALDS
- Gates Foundation funding $40 million effort to help develop mRNA vaccines in Africa in coming years
- Man arrested over alleged plot to kidnap and murder popular British TV host Holly Willoughby
- Rafael dissolves into a low pressure system in the Gulf of Mexico after hitting Cuba as a hurricane
- 'Just an embarrassment:' Major League Baseball managers are grossly underpaid
- Why Travis Kelce Could Be The 1 for Taylor Swift
- Clergy burnout is a growing concern in polarized churches. A summit offers coping strategies
Recommendation
-
'Yellowstone' premiere: Record ratings, Rip's ride and Billy Klapper's tribute
-
An Alabama city says a Mississippi city is dumping homeless people; Mississippi city denies misdeeds
-
Detroit Lions LB Alex Anzalone reveals his parents are trying to evacuate Israel amidst war
-
'There is no tomorrow': Young Orioles know the deal as Rangers put them in 2-0 ALDS hole
-
Trump announces Tom Homan, former director of immigration enforcement, will serve as ‘border czar’
-
Paris Hilton Shares Update on Her and Carter Reum's Future Family Plans
-
Juice Kiffin mocks Mario Cristobal for last-second gaffe against Georgia Tech
-
9 rapes reported in one year at U.K. army's youth training center