U.S. stocks could witness a strong opening on Wednesday after former President Donald Trump emerged victorious after a long-drawn battle with Joe Biden and Kamala Harris.
With Trump returning as the U.S. President, futures of all three major indices were strongly in the green on Wednesday, pointing to upbeat sentiment on Wall Street.
The Associated Press called a Republican win in three out of seven key swing states – North Carolina, Pennsylvania, Georgia, and Wisconsin. While Michigan and Arizona are still in play, trends lean toward Trump here, too.
Shares of Trump's social media company, Trump Media & Technology Group Corp. (NASDAQ:DJT), and his billionaire ally, Elon Musk's Tesla Inc. (NASDAQ:TSLA), surged in premarket trading on Wednesday.
While Trump Media shares were up over 33% in premarket trading, Tesla shares were up over 14% at the time of writing.
| Futures | Performance (+/-) |
| Nasdaq 100 | 1.74% |
| S&P 500 | 2.27% |
| Dow Jones | 2.87% |
| R2K | 6.16% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) gained 2.33% to $590.23 and the Invesco QQQ ETF (NASDAQ:QQQ) rose 1.82% to $501.15, according to Benzinga Pro data.
Cues From Last Session:
All three major indices ended the Tuesday session on a positive note, with the tech-heavy Nasdaq Composite surging the most.
Oil prices eased at the prospect of a Trump win resulting in a stronger U.S. dollar.
Treasury yields popped at the prospect of a Trump victory. The benchmark 10-year yield rose to levels last seen in July.
According to the CRFB's central estimate, Trump would increase the national debt by $7.75 trillion between 2026 and 2035, leading the government to issue more bonds to fund the deficit.
All sectors on the S&P 500 closed on a positive note, with consumer discretionary, industrials, and utilities stocks recording the biggest gains on Tuesday.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 1.43% | 18,439.17 |
| S&P 500 | 1.23% | 5,782.76 |
| Dow Jones | 1.02% | 42,221.88 |
| Russell 2000 | 1.88% | 2,260.84 |
It's not just the equities that surged – top cryptocurrency Bitcoin (CRYPTO: BTC) also surged to a new all-time high of $75,000 – at the time of writing, Bitcoin prices cooled a little to trade at $73,737, up more than 7% in the last 24 hours.
Insights From Analysts:
Veteran investor Mark Mobius, chairman of Mobius Emerging Opportunities Fund, told CNBC that a Trump victory would be good for the U.S. economy.
"It looks like a Trump presidential win but also a win for Republicans in House and Senate. If that happens, you're going to see the U.S. economy really taking off," he said.
Ryan Detrick, chief market strategist at Carson Group, believes that the stage is now set for U.S. equities to rally through the year-end.
"Once we kind of get through the election uncertainty… we do think that could potentially be the springboard to a potential another strong November," Detrick told CNBC in an interview.
"This economy is still strong. This is still a bull market."
Here's my full interview with @ScottWapnerCNBC on @CNBCClosingBell today. * Why a rally is likely once we get the election out of the way* The Fed could be what upsets markets this week* Tech is pricey, but there are some cheap areas for investors https://t.co/OHRImYEaCl
— Ryan Detrick, CMT (@RyanDetrick) November 5, 2024
Stephen Dainton, President of Barclays Bank PLC and Head of Investment Bank Management, told the Wall Street Journal that the markets had already decided that Trump would win.
“The markets are now trading full-on Trump trade."
Echoing Detrick’s bull run thesis, WisdomTree and Wharton School economist Jeremy Siegel said the equity surge could continue.
“In the near term, stock markets seem poised for further gains, bolstered by resilient earnings and steady economic fundamentals, while bond markets will likely grapple with higher yields and volatility ahead,” he said.
“The bull market in stocks looks set to continue, while bonds face a rougher road.”
On the economic data front, the trade deficit in the U.S. increased to $84.4 billion in September, recording the highest level since April 2022, and above market estimates of a $84.1 billion gap, versus a revised $70.8 billion gap in August.
The ISM services PMI rose to 56 in October, recording the highest reading since Aug. 2022.
See Also: How To Trade Futures
Upcoming Economic Data
Wednesday's economic calendar is light, with only S&P scheduled to release the final U.S. services purchasing manager’s index (PMI) at 9:45 a.m. ET.
Stocks In Focus:
- Trump Media & Technology Group Corp. (NASDAQ:DJT) shares popped over 37% in premarket trading on Wednesday.
- Tesla Inc. (NASDAQ:TSLA) shares surged over 15%. CEO Elon Musk has been a vocal Trump supporter and has also advocated for a "Department of Government Efficiency," or "DOGE."
- Coinbase Global Inc. (NASDAQ:COIN) shares surged over 13% after Bitcoin (CRYPTO: BTC) prices topped $75,000 for the first time.
- Private prison company Geo Group Inc. (NYSE:GEO) shares gained over 24% during premarket hours.
- Stocks of the biggest U.S. lenders, JPMorgan Chase & Co. (NYSE:JPM), The Goldman Sachs Group Inc. (NYSE:GS), and $Bank of America Corp(BAC-N)$. (NYSE:BAC) gained between 7% and 9% in premarket hours.
- Investors are awaiting earnings results from CVS Health Corporation (NYSE:CVS), Johnson Controls International Plc. (NYSE:JCI), and Qualcomm Inc. (NASDAQ:QCOM) today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures eased in the early New York session, falling by 1.25% as Trump's return to the White House has led to a stronger U.S. dollar.
The 10-year Treasury note yield surged to 4.467%.
Major Asian markets ended Wednesday on a mixed note, while European stocks showed strength in early trading.
Read Next:
- Donald Trump Defeats Kamala Harris To Win 2024 Election
Photo courtesy: Wikimedia
