The promise of a second Trump administration with GOP control of Congress set the stock market booming to record highs Wednesday with the potential for the “economy really taking off.”
While markets have traditionally favored gridlock in Washington, D.C. as a divided Congress added with stability, the initial response to Election Night found Wall Street riding a red wave. After former President Donald Trump was declared the victor, the Republican Party took control of the Senate and the House remained uncalled, the “quick and undisputed” results had the market roaring at its open.
At the time of this post, the Dow Jones Industrial Average had climbed over 1,400 points from the previous close, attaining a record high at 43,624.11. Likewise, the NASDAQ Composite had reached a high of 18,907.802, up roughly 470 points while the S&P 500 exceeded 5,900, up 120 points from the opening bell.
“There was relief that there was a quick and undisputed election result,” Trade Nation Senior Market Analyst David Morrison told the New York Post.
Looking ahead to an administration that wasn’t expected to follow the green agenda, nudging consumers toward EVs through carbon emission regulations while subsidizing markets, (read picking winners and losers), shares in Elon Musk’s Tesla rose 12% while competitors Rivian Automotive and Nikola dropped. The president’s plans to make the country a net energy exporter again saw Exxon and Chevron gain over 2% each.
Their gain was contrasted with drops in alternative energy companies like solar panel manufacturer Sunnova Energy, which was down 23%, and clean hydrogen equipment specialist Plug Power, which was down 14%.
Similarly, as Trump had embraced cryptocurrency rather than the globalist march toward a central bank digital currency (CBDC), shares for Coinbase climbed around 12% while Bitcoin rose nearly 8%.
“For now, investor sentiment is pro-growth, pro-deregulation, and pro-markets, as seen in the overnight market action,” The Bahnsen Group Chief Investment Officer David Bahnsen told CNBC. “There is also an assumption that M&A activity will pick up and that more tax cuts are coming or the existing ones will be extended. This creates a strong backdrop for stocks.”
“The market initially is focused on all the potential positives of a Trump candidacy as far as lower regulations, lower taxes,” Truist Co-Chief Investment Officer Keith Lerner said to Yahoo Finance.
Other proposals from the president-elect, including his intention to make trading fair again with the use of tariffs, left a number of Chinese stocks falling like e-retailer Alibaba which dropped by 4.5%, PDD Holdings Inc. fell over 5% and JD.com went down nearly 8%.
“It looks like a Trump presidential win but also a win for Republicans in the House and Senate,” Mobius Emerging Opportunities Fund Chairman Mark Mobius told CNBC while reacting to the presidential election. “If that happens, you’re going to see the U.S. economy really taking off.”
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