US equity indexes hit fresh intraday record highs, government bond yields surged, and the dollar strengthened after Republican presidential nominee Donald Trump beat his Democratic counterpart Kamala Harris in Tuesday's vote.
The Dow Jones Industrial Average soared 3.3% to 43,617.9, with the S&P 500 up 2.2% to 5,911.4 and the Nasdaq Composite 2.5% higher at 18,901.1. Financials, energy, and industrials led the top gainers, while real estate, utilities, and consumer staples formed the trio of sole decliners.
Trump is the second person to become US president in non-consecutive terms after Grover Cleveland's re-election in 1892. The Republican Party is edging closer toward a clean sweep of Congress following a successful bid to reclaim the Senate.
"Markets appeared to be expecting a continuation of Trump's deregulation policies from 2016-2020, as well as the potential for lower taxes," Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, said in a note. "US large cap equities could benefit from a combination of deregulation and potentially additional tax cuts. Smaller, domestic-oriented companies should find an advantage from tariffs on imports."
The US dollar appreciated against major trading partners following the electoral results, as reflected in the 1.6% surge in the US Dollar index to 105.12. The move comes ahead of a policy announcement on Thursday from the Fed's rate-setting panel, the Federal Open Market Committee.
According to CME's FedWatch tool, there is currently a 99% probability of a 25 basis point interest-rate cut being priced in for Thursday's FOMC meeting announcement, putting the target range at 4.5% to 4.75%. The remaining likelihood is for the Fed to pause its policy easing cycle that began in September with a 50 basis point reduction.
Most US Treasury yields rose, with the 10-year up 14.9 basis points to 4.44% and the two-year rate 7.1 basis points higher at 4.27%.
In economic news, mortgage applications fell by 10.8% in the week ended Nov. 1, driven lower by a further increase in mortgage rates to their highest point since July, according to data released Wednesday by the Mortgage Bankers Association. This decline follows a 0.1% decrease in overall activity in the week ended Oct. 25.
In company news, Super Micro Computer (SMCI) shares plunged 23.1% intraday, the worst performer on the S&P 500 and the Nasdaq, as fiscal Q2 guidance missed analysts' expectations. The company also remains delinquent on its form 10-K filing for the fiscal year ended June 30.
Wedbush said in a note Donald Trump's presidency could boost Big Tech and Tesla (TSLA) by driving major artificial intelligence initiatives, potentially easing regulatory barriers, and giving Tesla a competitive edge if the US government cuts electric vehicle subsidies and raises China tariffs. Shares of Tesla soared 14.2% intraday, topping the Nasdaq.
West Texas Intermediate crude oil rose 0.1% to $72.05 a barrel.
Gold plunged 2.8% to $2,671.80 an ounce, and silver plummeted 4.7% to $31.24 an ounce.
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