Source: Yahoo Finance

Trump Returns to the White House

Donald Trump’s victory surprised many, especially since it was achieved by a decisive margin. Trump garnered 73 million votes and won 312 of the 538 electoral votes, exceeding the threshold required for victory. His opponent, Vice President Kamala Harris, received 68 million votes—falling short by 13 million votes compared to Biden's 2020 count.

This outcome marked a significant shift from previous years, with Trump making notable gains among key voter demographics, like the Hispanic population. The heated campaign highlighted contrasting visions for the country, with Trump’s main goals focused on economic growth, deregulation, and an assertive "America First" approach but also high tariffs and tax breaks for the wealthiest from an already highly deficit budget.

Reaction of Major Markets

Following the election results, U.S. markets surged, reflecting investor confidence in Trump’s perceived pro-business stance. The Dow Jones Industrial Average jumped 3.57%, reaching a new record high and marking its largest single-day gain since November 2022. The S&P 500 and Nasdaq also hit new highs, rising by 2.5% and 2.95%, respectively. Bank stocks saw a notable rally, with institutions like Citi, Bank of America, and JPMorgan Chase posting significant gains as investors anticipated deregulation under Trump’s administration.

Bitcoin reached a new high of $76,000, while the U.S. dollar strengthened by over 1.5%, bolstered by expectations of Trump's tariff policies. However, the bond market was more cautious; the 10-year bond yield rose to 4.4%, amid concerns that Trump’s tariff and tax policies could spur inflation and dampen economic growth—concerns voiced by 23 U.S. Nobel prize laureates.

In Europe, the reaction was more restrained. The Stoxx Europe 600 inched up by 0.1%, with Germany's DAX slipping by 0.3% and France’s CAC edging up 0.1%. London's FTSE 100 was one of the few European indices to perform more robustly, closing 0.5% higher.

Asian Markets

Asian markets had a mixed response to Trump’s win. Japan’s Nikkei 225 surged 2.6%, gaining on expectations of a favorable corporate environment under Trump, which analysts believe could benefit Japanese equities. Australia’s S&P ASX index rose by a more modest 0.8%, reflecting regional caution.

Meanwhile, China’s Shanghai Composite finished largely flat, and Hong Kong’s Hang Seng index fell by 2.2%, reflecting concerns over potential U.S.-China trade tensions implied by Trump’s economic agenda.