Stock futures surged in premarket trading on Wednesday as investors bet on former President Donald Trump in the US presidential election.
Futures for the Dow Jones Industrial Average soared by 1,133 points, or about 2.7%. S&P 500 futures gained 2.4%, while Nasdaq 100 futures climbed 1.8%. The last time the Dow saw a jump of more than 1,000 points in a single day was in November 2022. Meanwhile, futures for the small-cap Russell 2000 benchmark surged 5%.
The market rally was fueled by hopes that a Trump presidency could drive a “high-octane” US economy. Investments seen as benefiting from Trump’s policies, such as Bitcoin and bank stocks, rose sharply. Bitcoin hit an all-time high of $75,000, driven by expectations of more favorable regulation under a Trump administration. The dollar also saw a significant rise, reaching its highest level since July, as traders anticipated that Trump’s proposed tariffs on major trading partners would strengthen the greenback.
Shares of Trump Media & Technology Group, the company behind the former president’s social media platform, surged by 50% in premarket trading. Banks, including JPMorgan, Bank of America, and Wells Fargo, saw gains of at least 6%, fueled by the prospect of fewer regulatory restrictions. Conversely, clean energy stocks like First Solar and SolarEdge faced losses as investors speculated that the support for renewable energy initiatives under the Democrats might diminish under Trump.
The 10-year US Treasury yield rose to approximately 4.43%, reflecting concerns that Trump’s proposed tax cuts and fiscal spending plans could increase the deficit and reignite inflationary pressures.
NBC News projected that Trump had secured 266 electoral votes, including key battleground states such as Pennsylvania, North Carolina, and Georgia, placing him just four electoral votes shy of the presidency. Wisconsin and Michigan remained too close to call. In the race for Congress, projections indicated that Republicans would likely regain control of the Senate, while the House of Representatives was still up for grabs.
Goldman Sachs predicted that a Trump victory, coupled with a Republican sweep of Congress, could drive a 3% rally in the S&P 500. Even a Trump win with a divided Congress could lead to a 1.5% increase in the index. Conversely, the bank forecasted that a victory by Vice President Kamala Harris, in the event of a divided Congress, could result in a 1.5% drop for the S&P 500.
While some analysts see a Trump win as a positive for stocks, with the potential for corporate tax cuts and deregulation, others caution that his proposed tariffs and the threat of a global trade war could inject volatility into the markets. Jason Trennert, chairman at Strategas, noted that while a Trump presidency could benefit stocks, there is also uncertainty surrounding the impact of his trade policies.
In the cryptocurrency market, Bitcoin’s rise to $75,389 highlighted the growing confidence in Trump’s stance on digital currencies. Trump has previously pledged to make the US a “bitcoin superpower,” which has garnered support from cryptocurrency enthusiasts.
CNBC and Financial Times contributed to this report.
