The Associated Press and other major news agencies have declared Trump the winner of the 2024 presidential election, confirming that he will return to the White House.
Trump won key states like Wisconsin and Pennsylvania, contributing a total of 29 electoral votes, putting him over the 270 votes needed for victory.
Along with his win, a series of intense market reactions on Wednesday caused investor sentiment to become unstable.
Stock Market
The Dow Jones Industrial Average soared 1,508 points, or 3.6%, closing at a record high of 43,729.93. The S&P 500 closed up 2.5%, and the NASDAQ Composite rose 2.9%, both closing at record highs.
With the Republican Party controlling Congress – what’s being called a “Republican sweep”- Trump is now in a better position to enact major policy changes, which some expect will continue to support the current bullish market.
“In our base case, we expect the S&P 500 to rise to 6,600 by the end of 2025, a nearly 15% price return from current levels, driven by expectations of benign U.S. growth, lower interest rates, and the continued structural tailwind from AI” UBS said in a note on Wednesday.
It’s anticipated that Trump will implement more inflationary policies due to his strong protectionist stance on immigration and trade.
Dollar Rises
Trump’s policies on restricting illegal immigration, imposing new tariffs, cutting taxes, and reducing regulations are expected to stimulate growth and inflation, making it less likely for the Federal Reserve to cut interest rates.
This led to a 1.66% rise in the U.S. dollar, reaching 105.09 and hitting a four month high of 105.44 on Wednesday.
Gold Prices Drop as Dollar Rises
With pressure from the stronger dollar and rising Treasury yields, gold prices plummeted, with spot gold falling 3% to $2,661.05 per ounce, while gold futures dropped nearly 3% to $2,669.50 per ounce.
Not only gold but other precious metals also saw negative movements on Wednesday, with platinum futures down 1% to $995.40 per ounce, and silver futures dropping 4.5% to $31.302 per ounce.
However, despite the drop on Wednesday, gold remains near recent record highs.
Gold prices could potentially reach $3,400 per ounce if U.S. real interest rates decline, as fiscal policies may weaken the U.S. dollar.
Bitcoin Hits New Records
Bitcoin, the world’s largest cryptocurrency surged to a new all-time high of $75,071.8 during the day, although the increase later fell back to $73,792.0 as of 09:10 ET.
For the cryptocurrency space, Trump had previously pledged to fire SEC Chairman Gary Gensler. This move “could reshape the landscape, easing pressure on the crypto sector and giving developers confidence to build without fear of sudden enforcement actions” said Gitay Shafran, founder of TheFedz.org.
Trump’s victory in the election has caused significant volatility in the financial markets, as investors anticipate new policies impacting growth and inflation. However, the market moving forward will likely present both risks and opportunities, requiring close monitoring and flexible adjustments from participants.
