Donald Trump election win turbocharges stocks, cryptocurrency and Trump Media
Donald Trump's victory at the polls is giving a fresh boost to stocks.
Dow futures soared nearly 1,400 points, or 3.2%, lifting the blue-chip market into record terrain before the start of trade on Wednesday. S&P 500 futures were up more than 2%, while the tech-heavy Nasdaq Composite also looked set to open strong.
"U.S. equity futures have traded up while election results have been tallied. In our base case, we expect the S&P 500 to rise to 6,600 by the end of 2025, a near-15% price return from current levels, driven by our expectations of benign U.S. growth, lower interest rates and the continued structural tailwind from AI," Solita Marcelli, Chief Investment Officer Americas, UBS Global Wealth Management, said in an email. "Lower corporate taxes and/or deregulation of the energy and financial sectors under a Trump administration could provide additional support."
Cryptocurrency is also surging as investors bet that the second Trump administration will benefit the volatile sector. Bitcoin prices rose nearly 8% to a record $75,345.00 in early trading, before dipping to about $73,500.
The former president, who was once critical of digital currencies, pledged during his campaign against Vice President Kamala Harris to make the U.S. the "crypto capital of the planet" and to create a bitcoin "strategic reserve."
"Bitcoin is the one asset that was always going to soar if Trump returned to the White House," said Russ Mould, investment director at AJ Bell, a British online investment platform.
"Trump has already declared his love of the digital currency and crypto traders now have a new narrative by which to get even more excited about where the price could go," he added.
The Republican Party's electoral success on Tuesday, which included winning control of the Senate, is also benefiting Trump's personal finances by boosting the stock price of Trump Media & Technology Group. Shares in the company, which owns the social network Truth Social and in which Trump owns a stake valued at more than $5 billion, jumped nearly 38% to $46.80 before markets opened.
Although markets have pushed to new highs this year, Wall Street analysts warn that some of Trump's key policy proposals could rekindle U.S. inflation, dampen economic growth and drive up the nation's debt. Specifically, Trump has proposed imposing tariffs of up to 20% on foreign goods and up to 60% on Chinese imports.
The Federal Reserve will offer its latest readout on the state of the economy on Thursday, with Wall Street analysts expecting the central bank to lower its benchmark interest rate by a quarter of a percentage point. The Fed in September dropped borrowing costs by 0.50 percentage points, its first cut since 2020.