Euphoria on Wall Street. The main indices of the New York Stock Exchange react with strong increases to Donald Trump’s victory in the American elections. While investors digest the Republican’s electoral success and push the indices to record highs, they prepare for the Federal Reserve’s (Fed) decision on interest rates.
The Dow Jones It closed with an increase of 3.57% to 43,729 points. The S&P 500 2.5% were recorded in the session, up to 5,928 integers. At the same time, the Nasdaq Composite He gained 2.85%, to 18,983 points. Thanks to these advances, All three indexes reached new all-time highs.
The Russell 2000which reflects the behavior of American small and mid-caps, added almost 6%, thus reaching levels not seen since the start of 2022. “This is not surprising, given indications that the Republicans will try to maintain existing tax cuts and they aspire to do more,” they emphasize from Janus Henderson.
After Trump won the election and the Republican takeover of the US SenateInvestors’ attention is now focused on whether Trump will also have the majority in Congress, what I would give greater ability to approve tax cuts and increase public spending.
“Trump pushed to limit immigration and increase customs duties,” recall Schroders economists. Its analysts expect that “as usual, some of these measures will only be applied in 2026 and 2027”. However, they believe that “the negative side of greater growth, a consequence of increased tariffs, along with immigration restrictions, will lead to higher inflation“.
Furthermore, they believe that “Trump could launch a deregulatory agenda very quickly, as he has demonstrated his willingness to use executive powers to move in that direction.”
“He has even already prepared the ground to very quickly implement deregulation policies and tariffs. On the other hand, other policies, such as fiscal policy, will be somewhat more compromised, particularly if Congress is divided,” they add.
Considering the possibility of a republican sweepLombard Odier analysts consider that, “even if The result of the elections in the United States is clearly favorable to American financial assets, This will not end market volatility. In the long term, investors tend to prefer governments with some level of checks and balances“.
So investors welcomed the fact that Trump’s proposed tax and regulatory policies benefited U.S. businesses, even though his plans also included restricting immigration and implementing tariffs that could increase inflation.
From Trump Media to MicroStrategy
Listed companies that could benefit from a second Trump term were growing strongly. Trump Media – the parent company of the next American president’s social network – soared 6.9%, while shares of Tesla they reassessed almost 15%. Its founder and CEO, Elon Musk, actively supported the Republican candidate during the election campaign.
Assuming that Trump could ease regulations and the Fed will have to keep rates high for longer, American banks also recorded significant increases.
Actually, Goldman Sachs It climbed 13.5% and led the Dow’s gains. Following, JPMorgan grew by 11.6%, and Caterpillar8.8%. On the contrary, the most significant declines were those of Nike (-3%) and P&G (-2.8%).
Cryptocurrency-related businesses They also appreciated on Wall Street in the heat of the all-time highs reached by bitcoin. Coinbase increased by 30.4%; MicroStrategy12.41% and Digital marathon18%.
The Fed
This same Wednesday, coinciding with the publication of the election results, The Fed begins its two-day meeting. The decision that bankers will make on interest rates will be known on Thursday.
The institution chaired by Jerome Powell is expected to reduce the price of silver by 25 basis points. However, and according to data collected by LSEG, the opportunities offered by the market to a further decline in December was reduced to 68%. On Monday, the percentage was 80%.
