Wall Street hits record high after Trump election win, as US dollar, bitcoin and Tesla shares surge – as it happened

Time to recap again….

Wall Street and bitcoin rallied to fresh record highs and the dollar soared after Donald Trump’s victory in the US presidential election, while renewable energy stocks fell.

Trump was declared the winner on Wednesday morning after securing the 270 electoral votes needed to take the presidency.

The Republicans also grabbed a majority in the Senate and the House of Representatives, giving Trump sweeping powers to cut taxes and impose tariffs on imported goods, which was also judged as a positive for the US currency.

When New York opened for trading on Wednesday, the benchmark S&P 500 rose 2.1%, the Dow Jones industrial average increased 3.1%, and tech-focused Nasdaq composite climbed 2.1% – all hitting all-time records.

That’s the Trump trade,” Marta Norton, chief investment strategist at Empower Investments, told CNBC.

“There’s a lot of emotion, there’s a lot of euphoria, based on perspective in markets today. And I think that doesn’t necessarily mean that’s the way markets are going to trade in perpetuity.”

Shares in the former president and president-elect’s own Trump Media & Technology Group, hours after revealing another heavy quarterly loss, increased by as much as 30% before losing ground in another volatile rally.

The dollar’s climb began after very early indications of a Republican win in Georgia and gathered pace throughout the day.

The dollar index – which measures the currency against six major peers including the euro and yen – advanced 1.25%, having earlier hit a four-month peak.

More here:

The pound is trading below $1.29 tonight, down a cent and a half.

Bitcoin has surged upwards today, currently up 7.8% at $74580, having hit a record high over $75k early this morning.

But shares in German carmakers took a hit today, on fears of a new TransAtlantic trade war.

Trump’s victory was declared just hours after a UK think tank warned that Britain’s growth would be halved if the now-president-elect imposed tough new tariffs on imports.

Here’s our economics editor Larry Elliott on how Trump’s policies will push up consumer prices:

After a historic day, the UK’s blue-chip stock index has ended the session broadly where it began.

The FTSE 100 has closed down 5.7 points at 8166 points, a dip of 0.07% – which feels like a tiny response to such seismic events in America.

But… there are some big moves on the stock exchange today. Electrical equipment rental firm Ashtead’s shares jumped by 5.6%, indicating optimism of faster US growth, while Barclays gained 5.4% on expectations of higher interest rates for longer.

Weapons maker BAE Systems was another riser, up 4.9%, while cardboard box maker DS Smith are up 3.4%.

British Airways’ parent company, IAG, is up 3%, benefitting from the drop in the oil price today.

The weak pound (down 1.5 cents tonight) will have lifted the value of multinationals who earn revenue in dollars.

The losers colum included mining companies Fresnillo (-3.9%) and Antofagasta (-3.7%), tracking the fall in the gold and copper prices today.

While the exact shape and size of Donald Trump’s upcoming tariffs and tax cuts are still unknown, markets have already moved to reflect the fact they will be enacted.

So explains Jonathan Mondillo, global head of fixed income at abrdn, who explains that expectations of a more relaxed regulatory environment have also supported the banks and energy companies.

Mondillo adds:

“It is likely the House [of Representatives] will end up in the control of the Republicans, as such we would expect to see a more ambitious agenda for the incoming President.

While trade and immigration policy are largely within the control of the Executive Branch, a red sweep would put both corporate and individual tax proposals that had been talked about on the campaign trail firmly on the agenda in the important first 100 days of a Presidency. The interplay between trade tariffs and tax cuts will depend to what extent both are enacted, as tariffs act as a headwind to growth while tax cuts are more supportive.

Curves steepened in the first hours during and after the vote count, and have continued to do so today. This is something we think should continue into the long term, particularly for very long dated maturities where there is going to be upward yield pressure.”

A group representing the electric vehicle industry says it was ready to work with President-elect Donald Trump, who has vowed to reverse many pro-EV policies of his predecessor.

The Zero Emission Transportation Association, which includes Tesla, Rivian, Lucid and battery maker LG, said the “next four years are critical to ensuring that these technologies are developed and deployed by American workers in American factories for generations.”

Trump has vowed to repeal Biden administration rules to speed adoption of electric vehicles and said he may back repealing tax incentives for EV sales.

The spectre of stagflation is haunting financial markets today, as investors calculate that Donald Trump’s plans for tax cuts, blanket tariffs and an immigration clampdown would lift inflation pressures and hurt growth.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, explains:

‘’Fresh nervousness has been sweeping financial markets after Donald Trump’s triumphant win. His policies look set to increase inflationary pressures and swell the US deficit even further, with knock-on effects expected for the UK economy. 10-year treasury yields have jumped as traders assess the impact that the twin promises of tariffs and tax-cuts will have on the price rises and on US government debt levels.

Gilts often move in tandem with treasuries and this special relationship is playing out today, pushing up UK borrowing costs sharply, with 10-year gilt yields rising to the highest level since the Financial Crisis in 2008. UK government bonds had already been skittish, with sentiment souring after concerns about the amount of borrowing the Labour administration was taking on. Now Trump’s win has piled on further pressure

Concerns about the inflationary knock-on effect of the fresh wave of tariffs promised by Trump are seeping through the markets. There is also concern that his trade policies could hold back Britain’s economic growth. The fear of a stagflation scenario emerging in some economies appears once again to be stalking markets..

6 Nov 202411.11 EST

Reeves: We'll make strong representations to US about importance of free and open trade

Richard Partington

UK chancellor Rachel Reeves has told MPs this afternoon that it’s too early to start making changes to forecasts for our economy, because of the US presidential election.

Testifying to the Treasury committee, Reeves adds:

But i would say this, our trading relationship, our economic relationship with the US, is absolutely crucial. The US is the single biggest trading partner, trade between our two countries of, I think, £311bn a year. So of course that relationship is crucial. And of course our special relationship goes much beyond trade, for our security and defence relationship as well

“I’m confident those trade flows will continue under the new president and indeed president trump has been president of the US before and we continue to have a strong and healthy economic relationship

“The US also benefit from that access to free and open trade with us and other countries around the world, and its what makes us richer as societies to benefit from that”

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Reeves also said she would make “strong representations” about the importance of free trade to Donald Trump’s incoming administration.

“It’s a trade relationship with the United States and we will make strong representations about the importance of free and open trade, not just between ourselves and the United States but globally.”

Yup:

Although equities are surging today, traders are also noting that US bond prices are falling sharply.

That’s pushed up the interest rate (or yield, in market jargon) on 10-year US Treasury bills to 4.45% today, up from 4.28% last night.

That’s the highest level since 1 July.

As bond yields rise when prices fall, this shows that investors are demanding a higher rate of return for holding US government debt;.

They may be judging that more bonds will need to be issued if Trump cuts taxes – or simply that Trump’s economic measures will drive up growth, meaning long-term interest rates will be higher.

European stock markets have now fallen into the red, hit by fears that Donald Trump will impose new tariffs on European exports into the US.

Germany’s DAX is now down 1%, with the country’s carmakers hit by trade war worries.

France’s CAC 40 has lost 0.5%, while the Italian FTSE MIB is down 1.5%.

As Neil Wilson of Markets.com puts it (quoting Trump):

The early positivity in Europe has evaporated as quickly as you can say ‘tariffs are my favourite word’.

Trump and the Republicans’ electoral triumph is set to cause short-term market gains, predicts Kate Leaman, chief market analyst at AvaTrade.

The incoming president has historically been a market-friendly candidate, focusing on policies that benefit corporations and investors. A Trump administration would likely continue lowering corporate taxes, boosting large corporations like Apple or Amazon and helping to drive their stock prices higher.

“Along with more market-friendly policies, Trump’s win is also likely to lead to aggressive deregulation, with the combination driving stronger short-term gains across US equities, especially in sectors like industrials, financials and healthcare – all of which thrived during his first term. A Republican win will also likely mean less regulation and more support for fossil fuels, benefiting traditional energy companies and presenting a challenge to the renewable sector.

There are signs of support for Donald Trump on the US stock exchange trading floor today:

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The US dollar is continuing to strengthen, pushing the dollar index (the greenback against a basket of currencies) up by 1.8% today.

This has left the euro on track for its fourth worst day in the last nine years.

The euro has tumbled by two cents, or 1.87%, against the US dollar today to $1.0725, down from $1.093 last night, before US polls closed and the first election results came through.

That would be the euro’s biggest percentage fall since 19 March 2020, when it fell by 2.04% when the Covid-19 pandemic sparked a race into safe haven assets such as the dollar.

It lost 2.37% on 24 June 2016 after Britain voted to leave the European Union, and 1.88% on 14 June 2018, when the European Central Bank left interest rates at record lows.

As flagged earlier, US bank stocks are big beneficiaries of Donald Trump’s election win.

Goldman Sachs are the top riser on the Dow Jones industrial average, up 10.25%, followed by JPMorgan Chase who are up 8.6%.

US banks will benefit from higher interest rates, if the US Federal Reserve is now more reluctant to cut borrowing costs

They’re followed by construction equipment maker Caterpillar, up 6.3%,

Shares in Tesla have surged by 14.5% in early trading.

That lifts them from $251.44 last night to $286.50 in early Wall Street trading today. That pushes up Tesla’s market capitalisation by around $112bn, from $807bn to $919bn.

This rally is a boost to Elon Musk’s wealth.

The value of his 12.8% stake in Tesla has risen from $103bn last night, to around $118bn, meaning Musk’s stake is worth about $15bn more than before the election result.

Having backed Trump during the election campaign, Musk could now benefit from the result, analysts say, perhaps if the next president imposes tariffs on electric vehicles made in China.

Trump has also pledged to form a government efficiency commission, led by Musk.

Small US stocks are also rallying, lifting the Russell 2000 index of smaller companies by 4% to the highest since 2021.

The decisive nature of Trump’s win appears to be driving the US stock market up.

David Morrison, senior market analyst at fintech and financial services provider Trade Nation, says:

Ahead of the vote, the major concern was that the result would be drawn out and disputed. This led to a jump in volatility and a sell-off across risk assets. As it happens, there has been no uncertainty.

Donald Trump looked like the clear winner within a few hours of the polls closing. US stock indices had already posted a strongly positive session on Tuesday, making back most of the losses from the end of last week. It appeared that many traders were convinced that the polls were understating the positive momentum which showed up in Trump’s numbers over the last fortnight. But it’s worth pondering whether the strength of the stock market rally is due to Trump winning, or relief that there’s a clear and uncontested result. In truth, it’s probably a bit of both.

Newsflash: The US stock market has opened at a new alltime high, as investors react to Donald Trump’s stunning electoral win.

Investors are racing into riskier assets, following the Republicans’ win in the race for the White House, and their taking. control of the Senate too.

Bloomberg TV are calling it a “face-ripping rally”

The S&P 500, the broad index of US stocks, has jumped by 1.9% to a new intraday high.

The Dow Jones industrial average, of 30 large US companies, jumped by 3% to 43,508 points, also hitting a record high.

The tech-focused Nasdaq is slightly lagging behind in the face-ripping stakes, up 1.8%.

Investors are betting that Trump’s economic policies will stimulate growth, and also inflation (as new tariffx, tax cuts and immigration curbs are all potentially inflationary).

Richard Flax, chief investment officer at Moneyfarm,

The resurgence of a newly empowered Trump—commanding strong support across the popular vote, the Senate, and the House—signals that this will be a pivotal presidency for at least the near term. With a more compliant Republican Party following the departure of sceptics, Trump is now positioned to govern more freely and in line with his vision.

We anticipate a return to core policies such as tax cuts and deregulation, coupled with Trump’s characteristic protectionist and isolationist stance—factors likely to influence everything from inflation to supply chain dynamics. The immediate market response reflects this, with a strengthening dollar, rising equity markets, and gains in Nasdaq 100 and S&P 500 futures. Additionally, the 10-year Treasury yield is pushing higher as investors adjust to expectations of these policies.

While we still expect the Fed to enact a rate cut this year, Trump’s anticipated inflationary pressures may lead the FOMC to take a more cautious, wait-and-see approach in early 2025, assessing the impact of the new administration before further action.”

Gold and silver had been seen as beneficiaries of the Trump trade in the run-up to the US election, but both are actually falling today.

The gold price has dropped by 2.7% to $2,669 per ounce, its lowest since mid-October.

Silver has dropped by over 5% to around $31 per ounce, also around a three-week low.

This will be partly due to the strength of the US currency (a strong dollar means you need fewer of them to buy a commodity).

Samer Hasn, senior market analyst at XS.com, says:

Gold is retreating significantly today, falling below $2,700 per ounce in spot trading at the peak of the declines, erasing November’s gains.

The drop in gold prices comes as the US dollar and Treasury yields are on track to record their biggest daily gain this year as Donald Trump returns to the White House for a second time.

Irish Prime Minister Simon Harris has warned that that the risk of a transatlantic trade shock is rising.

Harris made the comments shortly after congratulating Donald Trump on his election as U.S. president, Reuters reports.

Harris was speaking in parliament in relation to his government’s policy of partly setting aside big budget surpluses. in a new sovereign wealth fund, saying it was doing so “at a time when the risk of a transatlantic trade shock is rising.”