• Markets are moving based on the US election results, which strongly indicate a victory for Donald Trump.

• Trump Media shares rose as much as 62% in premarket trading and Bitcoin hit a record high.

• The dollar gained thanks to Treasury yields and Trump’s proposed tariffs, deportations and other policies.

Investors are flocking to Trump trading as Donald Trump’s second presidency looks certain.

Barring any adverse events, Trump will reach the 270-vote Electoral College majority needed to win.

“The so-called ‘Trump trade’ is in full swing this morning,” İpek Özkardeskaya, a senior analyst at Swissquote Bank, said in a note. he said.

“US bond yields are rising on expectations that the debt bubble will expand further under Donald Trump’s presidency. Bitcoin has set a new record. In traditional foreign exchange markets, the US dollar is rising against most major currencies.”

Even before Trump emerged as the presumptive winner early Wednesday morning, the strong performance came after the polls closed. Trump trade This situation, which has been dependent on the former president’s election chances for months, is gaining momentum.

At the center of the trade are Trump’s plans for a near-universal tariff and mass deportations that would accelerate inflation.

Here’s a summary of how markets moved in response to Trump’s apparent victory:

Stock futures are on the rise

Supporters of Trump’s proposed tax and regulatory policies see them as pro-business moves that will boost corporate profits and increase deal activity.

S&P 500 futures increased by 2.2 percent Dow Jones Industrial Average futures It reached record levels with an increase of 2.8% and Nasdaq 100 futures increased by 1.7%.

“Equity markets are pleased so far with the clarity of Trump’s win this morning, and futures are pointing to solid openness,” Neil Wilson, chief market analyst at Finalto, said in a morning note.

Investors’ positive reaction also reflects their general optimism about the U.S. economy.

“Economic growth remains strong, earnings growth has been solid throughout the third-quarter reporting season, and strong ‘Fed sell’ sentiment continues to support,” Pepperstone’s Brown said. he said.

“With election uncertainty now out of the way, the path is clear for further gains that will carry the market through the end of the year,” Brown added.

European stocks followed the lead of US futures, while Britain’s benchmark FTSE 100 rose 1.3% at 9:30 a.m. local time (4:30 a.m. ET). Germany’s DAX rose 1.4% in morning trade, while France’s CAC40 index rose 1.7%.

Trump Media and Tesla are winning

Trump Media and Technology Group Shares rose as much as 62% to $55 in pre-market trading and were up 33% at last check. Share enjoyed a meme-like rally In recent weeks, the former president has strengthened his position in betting markets and polls.

Investors also supported other stocks expected to benefit from Trump’s second term, boosting Elon Musk’s Tesla by 12% and crypto companies MicroStrategy and Coinbase by 13% and 12%, respectively.

Treasury yields rise sharply

Criterion 10-year Treasury yield It rose by 13 basis points to 4.41%, its highest level since the beginning of July. two year return The index, which is most directly sensitive to the Fed’s monetary policy changes, rose 6 basis points to 4.25%.

Here’s how Trump’s victory is seen: an inflationary eventThis will lead to higher prices and wage increases.

Investors have been pricing in higher yields for weeks on the view that Trump’s policies will make it harder for the Fed to cut interest rates further, especially if inflation flares up.

The strong reaction in the Treasury market “suggests that bond investors are putting the election results and the economic ramifications of a Trump victory ahead of the Federal Reserve, even though the Fed is expected to cut interest rates and raise interest rates this week,” Kathleen Brooks, XTB’s research director, said in a morning note. cutting cycle for the year,” he said.

US dollar is on the rise

The Bloomberg Dollar Spot Index rose 1.3% after rising as high as 1.7%, the highest in four years. The dollar climbed against all G10 currencies, including gains of 1.5% against both the euro and the yen.

The dollar also rose 2.2% against the Mexican peso. The currency crossover is seen as a harbinger of Trump’s electoral chances, given his desire to bring Mexican manufacturing back to the United States.

The expected inflationary nature of Trump’s policies will likely push interest rates higher and could cause the Fed to tighten monetary policy, reversing its current easing efforts. These rising rates will then support further gains in the dollar.

“The election results reinforce the current USD bull case, with US economic growth predictably continuing to outperform its peers and participants not particularly bothered by the Fed’s rapid pace of policy normalization,” said Michael Brown, senior research strategist at Pepperstone. he said in a morning note.

Small-cap stocks are on the rise

Small-cap Russell 2000 index futures were up 5.9% as of 4:14 a.m. New York time. They appear to have received a big boost from Trump’s protectionist policies because they generally have more domestic operations.

Bitcoin reached a record level

The cryptocurrency set a new high above $75,000 before retreating to around $73,000. Trump’s win is seen as a bullish signal for Bitcoin and the broader cryptocurrency industry, as Trump stated firmly embraced digital assets In recent years.

“For many, Bitcoin is a hedge against currency devaluation and inflation because it operates outside the constraints of traditional monetary policy,” Naeem Aslam, chief investment officer at Zaye Capital Markets, said in a morning note. he said.

“With Trump winning, conditions may be right for the Bitcoin price to continue rising as investors look for an alternative to the dollar,” he added.

Volatility is falling

The CBOE Volatility Index, which measures expected volatility in the stock market over a 30-day period, fell sharply around 3 a.m. ET on Wednesday, just after it became clear that Trump was poised for victory. VIX fell more than 20%; This likely reflects investors welcoming a clear outcome in the election.

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