The financial markets experienced strong fluctuations, with bond prices falling, US equities reaching all-time highs, and the currency rising post Donald Trump’s victory in US Elections 2024.
Expectations of Trump’s economic plans, such as tax cuts, regulation, and trade tariffs, which they predict would spur growth but might also fuel inflation, prompted investors to respond quickly.
As the S&P 500 rose 2.51% to its highest level ever, the US stock market exploded. Trump’s pro-business positions and regulatory rollbacks are likely to help small-cap stocks and banks, which witnessed significant increases.
In addition to the Russell 2000 index, which monitors small-cap companies, rising almost 6%, Tesla shares increased 14.75%.
Due in part to expectations that Trump’s administration would promote a more lenient approach to cryptocurrency regulation, other tech stocks also witnessed notable increases, with Bitcoin hitting new all-time highs.
As traders expected Trump’s proposals to spur economic development, the dollar surged, reaching its highest level in more than four months.
On the contrary, the Mexican peso and the euro also saw drops; the peso hit its lowest level in more than two years as a result of worries about increased taxes under Trump’s trade policy.
US Treasury rates surged in the bond market, with the benchmark 10-year yield reaching its highest level in months at 4.48%.
Concerns that Trump’s projected fiscal stimulus, which includes tax cuts and more government spending, might result in larger deficits and inflation are reflected in the sell-off in Treasuries.
Investors anticipate that tariffs and rising consumer prices will increase inflationary pressures, which will raise long-term interest rates even further.
The outcome of the US election also had an impact on international markets.
In the aftermath of rising US Treasury rates, Australian markets had a lift from stronger bank shares, while Japanese equities saw gains owing to a lower yen on Thursday.
However, when investors considered the possible effects of Trump’s policy on international trade and tariffs, markets in China and Europe produced a range of outcomes.
All things considered, Trump’s win has moved investor sentiment in favor of pro-growth assets, with the currency and stock market being driven by confidence about the US economy.
However, worries about inflation and trade disputes will continue to play a significant role in shaping market conditions in the months ahead.
Having more than 270 electoral votes, Donald Trump has secured a second term as president of the United States.
Vice President Kamala Harris, his Democratic opponent, has congratulated him and promised to facilitate a peaceful handover of power.
