U.S. Stock Futures, Dollar and Bitcoin Surge as Trump Wins Race to White House

November 6, 2024 | 07:37 pm

TEMPO.CO, London - Major stock markets around the world rallied on Wednesday, while bitcoin hit a record high and the dollar was set for its biggest one-day jump since early 2023 as Republican Donald Trump was elected U.S. president.

U.S. Treasury yields meanwhile rose to their highest levels since July as bond investors bet a Trump presidency could usher in tax cuts and tariff hikes that boost the deficit and inflation.

Trump, 78, recaptured the White House on Wednesday by securing more than the 270 Electoral College votes needed to win the presidency, Edison Research projected, following a campaign of dark rhetoric that deepened the polarization in the country.

U.S. S&P and Nasdaq futures jumped more than 2% and those tracking the small cap Russell 2000 soared 6.2%. The dollar index rallied 1.4% and was set for its best day since March 2023.

Japan's Nikkei surged over 2.5% (.N225) as the yen slid .

The rally in U.S. stock futures and signs of a decisive result cheered equity markets, with European shares up more than 1% (.STOXX) as stock investors put aside worries about the impact of potentially higher tariffs for now.

It was a different story in emerging markets, where Mexico's peso sank to its weakest level in over two years.

"The market is definitely moving in line with the Trump playbook; stocks and small caps, in particular, are higher on the idea that Trump will be good for U.S. companies," said Seema Shah, chief global strategist for Principal Asset Management in London.

"Across emerging markets, you can see China and Europe are struggling with the idea that they could face higher tariffs, and U.S. bond yields higher with expectations for a higher fiscal deficit and inflation."

BONDS DISCONNECT

Concern that higher tariffs under a Trump presidency could deal the region's economy a fresh blow pushed the euro down 1.6% to $1.074 , with the currency set for its biggest daily fall since March 2020, outpacing a 1.2% fall in sterling.

German two-year bond yields fell 11 basis points to 2.19% , while money markets priced in lower European Central Bank rates.

"For European businesses, Trump’s return to the White House would mean considerable trade policy and geopolitical uncertainty, with negative implications for growth on the continent," said Berenberg chief economist Holger Schmieding.

In contrast, U.S. borrowing costs rose.

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