MARKET SNAPSHOT
U.S. stocks surged and Treasury yields rose sharply on expectations of a business friendly Trump administration. The dollar rose while gold fell 2.7%. Oil fell in part on the dollar strength.
MARKET WRAPS
EQUITIES
The major indexes rallied after Donald Trump's presidential win, with the Dow Jones Industrial Average racking up the largest gain.
The Dow Jones Industrial Average climbed more than 3.5% to close at a record high. The Nasdaq Composite also ended the day at a new high water mark after gaining nearly 3%. The S&P 500 increased 2.5% and also closed at an all-time high.
Nvidia, Trump Media & Technology and Tesla were big winners on the stock market today. Financial stocks led the Dow Jones and S&P 500. Credit card and bank stocks topped the S&P 500, with Discover Financial Services and Synchrony Financial both surging between 18% and 19%.
Earlier Wednesday, Chinese shares closed mixed as investors monitored the U.S. presidential election results. Trump's lead in the race raised concerns about additional tariffs on Chinese goods and heightened geopolitical tensions.
The benchmark Shanghai Composite Index ended 0.1% lower, the Shenzhen Composite Index rose 0.1%, and the ChiNext Price Index was up 1.1%. Hong Kong shares ended lower, with the Hang Seng Index dropping 2.2%. Tech stocks led the declines.
Japan's Nikkei Stock Average closed 2.6% higher as rising expectations of a Trump win in the U.S. presidential elections pushed the dollar to a three-month high against the yen. Leading the gains were conglomerates, retail, and manufacturing stocks.
Stocks in Australia rose as the S&P/ASX 200 Benchmark Index gained 0.8%. The blue-chip S&P/ASX 20 Index, which includes the country's major banks and iron-ore miners, advanced 0.7%.
New Zealand's NZX-50 closed 0.1% lower amid weakness in shares of large-scale utilities. Real-estate and consumer-related stocks helped pare overall losses.
COMMODITIES
Oil futures finished lower, but pared much of the earlier losses that pulled U.S. prices briefly below $70 a barrel, as traders weighed the potential impact of former President Donald Trump's win in Tuesday's presidential election.
West Texas Intermediate crude for December delivery settled down 0.4% at $71.69. January Brent crude fell 0.8% to $75.66 a barrel. Brent and WTI marked their first losses in six sessions.
The election, meanwhile, has strengthened the U.S. dollar, which, "at the margin, pressures oil prices," said Dave Aspell, co-chief information officer of Mount Lucas Management.
Front-month November gold futures fell 2.7% to $2,667.60 an ounce on Donald Trump's victory in the Presidential election.
Gold has now fallen for two out of the last three trading sessions, and has dropped 4.3% since the front-month contract hit a record-high of $2,788.50 an ounce on Oct. 30. "The gold market had been pricing in a contested result, so a clear victory removes an element of risk; hence the move the speed of which would have been exacerbated by algo's," said Rhona O'Connell of StoneX.
TODAY'S TOP HEADLINES
The Winners and Losers From the 'Trump Trade' Gripping Markets
Stock indexes ripped higher Wednesday after Donald Trump was elected president and Republicans' Senate victory put a red sweep in play.
Investors are betting a Trump presidency will be good for economic growth and that Republican control of Congress would clear the way for tax cuts and deregulation. While those forces boosted stocks, concern that a roaring economy and Trump's promised tariffs could again stoke inflation hit government bonds hard, sending yields-and borrowing costs-higher.
Trump Defeats Harris, Marking Historic Comeback
Republican Donald Trump leveraged anxieties about the cost of living and illegal immigration to score a decisive victory over Democratic Vice President Kamala Harris, reclaiming the White House in an electoral triumph certain to alter America's priorities and economic relationship with the world.
Trump, who won election in 2016 as the 45th president, now will be the 47th and just the second candidate in U.S. history to win nonconsecutive White House terms. His historic win blew away expectations for a prolonged vote count decided by razor-thin margins, as polls had indicated for weeks.
Harris spoke to the president-elect Wednesday and congratulated him on his election. Trump also spoke to President Biden, who "expressed his commitment to ensuring a smooth transition and emphasized the importance of working to bring the country together," the White House said. Biden invited the former president to the White House "in the near future."
What Trump's Win Means for the Economy
Voters have re-elected Donald Trump in great part out of dissatisfaction with the economy under President Biden and nostalgia for the low inflation and prepandemic conditions of the former president's first term.
To fulfill those voters' hopes, Trump's main economic tools will be the same as in that first term: tariffs and tax cuts. But there's a difference. The tariffs he's planning will be broader and higher, and the tax cuts more narrowly targeted.
The consensus of economists and investors is that tariffs will put upward pressure on inflation while tax cuts could spur growth and add to deficits, together tending to nudge interest rates higher. And indeed, long-term Treasury bond yields had risen recently on strong economic data and Trump's improved polling, and shot up early Wednesday, along with stock-index futures, as Trump's victory became apparent.
Fed Readies a Rate Cut and Faces These Four Questions
The Federal Reserve is widely expected to cut interest rates by a quarter-percentage point at its meeting that ends Thursday. The bigger question is how many more cuts officials expect will be warranted to preserve a solid job market without reversing recent declines in inflation.
Officials will be hard-pressed to offer any firm answers on that question because their reply will be some version of the following: It depends.
This week's decision lacks the suspense of the last one, when markets weren't sure how big the Fed's rate cut would be. That means that Fed Chair Jerome Powell's press conference at 2 p.m. Eastern time on Thursday will be the main event.
Qualcomm Stock Jumps on Earnings Beat
Qualcomm reported better-than-expected earnings results for its fourth quarter on Wednesday afternoon. Its shares were up sharply in after-hours trading.
The chip maker posted adjusted earnings per share of $2.59 against Wall Street's consensus estimate of $2.56, according to FactSet. Revenue for the quarter reached $10.24 billion, above analysts' expectations of $9.91 billion, and up 18% from a year ago.
Qualcomm's core business, smartphone chips, saw revenue of $6.1 billion, in line with expectations and, up 12% on the year. IoT chip revenue was $1.7 billion against consensus estimates of $1.5 billion, up 22%. The automotive chip segment was up 68% to $899 million, beating expectations of $810 million.
Lyft shares jump on results and autonomous-vehicle partnership
Lyft Inc. on Wednesday reported third-quarter sales that beat expectations while offering an upbeat demand forecast, after the ride-hailing platform earlier in the day announced an autonomous-vehicle partnership with Mobileye Global Inc.
The company's shares LYFT jumped 23% after hours.
Lyft reported a net loss of $12.4 million, or 3 cents a share, compared with $12.1 million, or 3 cents a share, in the same quarter last year. The per-share figure was in line GAAP estimates from analysts surveyed by FactSet.
Expected Major Events for Thursday
00:30/AUS: Sep International Trade in Goods & Services
02:00/JPN: Oct Imported Vehicle Sales
02:00/PHI: 3Q GDP
03:00/SKA: 1H KDI Economic Outlook
04:30/JPN: Oct Corporate Insolvencies
05:30/AUS: Oct Official Reserve Assets
07:00/MAL: Oct International Reserves, end of month
08:30/HK: Oct Foreign Exchange Reserves
09:00/SIN: Oct Official Foreign Reserves
09:59/PHI: Oct Gross International Reserves
09:59/CHN: Oct Foreign Exchange Reserves
09:59/CHN: Oct Commodities Trade Data
09:59/CHN: Oct Energy Trade Data
09:59/CHN: Oct Trade
10:59/INA: Oct International Reserves
23:30/JPN: Sep Household Spending
23:50/JPN: Oct International Reserves / Foreign Currency
23:50/JPN: Oct Provisional Trade Statistics for 1st 20 days of Month
All times in GMT. Powered by Onclusive and Dow Jones.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
November 06, 2024 16:58 ET (21:58 GMT)
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