Wall Street stocks soared to unprecedented heights whilst investors offloaded bonds as Donald Trump’s momentous US election triumph prompted global markets to recalibrate, pricing in an anticipated regime of trade tariffs and tax reductions.
The dollar demonstrated remarkable vigour, posting its most substantial single-day gain in two years, strengthening markedly against the euro, yen, and pound. Market participants re-embraced the signature ‘Trump trades’, anticipating his policies would bolster equities, drive inflation upwards, and moderate the pace of interest rate reductions.
Bond markets experienced significant turbulence, with yields on the 30-year ‘long bond’ climbing to 4.67 per cent, marking a 0.16 percentage point increase – its most dramatic movement in 24 months. The US Treasury successfully attracted robust demand for £25bn in fresh 30-year bonds, though the cost implications were substantial, adding over £1bn to the interest payment requirements compared to the previous day’s rates.
The broader market response was decisive, with the S&P 500 index advancing 2.5 per cent while the Nasdaq Composite gained 3 per cent. Companies aligned with Trump’s vision witnessed remarkable gains, with Tesla surging nearly 15 per cent, buoyed by CEO Elon Musk’s known support for the former president. Banking institutions, anticipating lighter regulatory oversight, also rallied significantly.
European markets diverged from their American counterparts, with the Stoxx Europe 600 index declining 0.5 per cent as concerns mounted over the region’s export outlook. The commodities sector faced downward pressure, with copper prices retreating 4 per cent in London trading, reflecting anxieties about potential trade barriers impacting global growth.
Cryptocurrency markets responded positively to the electoral outcome, with Bitcoin establishing a new record at $76,499, influenced by Trump’s pro-cryptocurrency stance and his pledge to establish the US as a global leader in digital currency innovation.
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