LONDON: Wall Street rallied to new highs on Wednesday, while the dollar and Bitcoin surged, as markets responded to Donald Trump’s return to the White House. The former president defeated Vice President Kamala Harris, marking a dramatic political comeback four years after his previous loss to Joe Biden.
U.S. Stock Markets Rally
The Dow Jones jumped three percent, with the S&P 500 and Nasdaq Composite each gaining around two percent. Analysts attribute this rally to expectations that Trump’s pro-business stance will drive policies favorable to corporate profits.
“Trump is seen as business-friendly and likely to implement tax cuts with little resistance, especially now that the Democrats have lost control of the Senate,” said Fawad Razaqzada, an analyst at City Index and FOREX.com.
Tesla and Trump Media Shares Soar
Trump’s victory has sparked gains in several key stocks, especially in sectors expected to benefit from his policies. Tesla’s shares jumped 13 percent after Trump praised CEO Elon Musk, a major campaign backer, as a “star” in his victory speech.
Similarly, Trump Media & Technology Group saw its stock surge by 30 percent. The company, in which Trump holds a major stake, has tripled in value since hitting lows in September. Trump’s stake is currently valued at about $5 billion.
Tim Walz Thanks Harris for Support in the Presidential Campaign
Stronger Dollar and Bitcoin Record
As Trump’s victory fueled optimism about growth, the dollar rose sharply against major currencies. The dollar gained around two percent against the euro, with investors also betting on fewer interest rate cuts from the Federal Reserve due to Trump’s inflationary tax cuts.
Bitcoin surged to an all-time high, jumping $6,000 to reach $75,371.67, surpassing its previous record of nearly $74,000 in March. Trump has pledged to make the U.S. a global leader in cryptocurrency and plans to task Musk with a large-scale audit of government spending.
European and Asian Markets React Cautiously
While U.S. markets rallied, European stock markets fell into the red, as concerns grew over Trump’s potential tariffs on European automakers. Frankfurt’s index dropped by 1.1 percent, with automaker stocks showing the largest losses.
Asian markets also showed mixed reactions. Chinese stocks were hit hard, reflecting investor fears that Trump may revive tariffs on Chinese imports, affecting the regional economy.
Analysts Highlight Pro-Growth Policies
Patrick O’Hare, an analyst at Briefing.com, said that Trump’s economic policies are being embraced by the stock market for their pro-growth potential. His plans for tax cuts and deregulation are expected to boost corporate profits, especially in big tech and finance sectors.
“Expectations are high that a Trump presidency will mean fewer regulations on big tech and big finance,” O’Hare explained, emphasizing the market’s enthusiasm for policies that support industry growth.
Fed Decision Expected
As markets respond to Trump’s victory, the Federal Reserve is set to announce its latest interest rate decision on Thursday. Analysts expect that Trump’s tax cuts could lead to inflation, which may prompt the Fed to hold off on further rate cuts in the coming months.
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