Election Outcome
Following a decisive victory in the U.S. presidential election, the stock market experienced a historic surge with the Dow Jones Industrial Average recording its largest post-election gain in 128 years. Donald J. Trump’s electoral win resulted in the Dow soaring by 1,508 points, or 3.6%. This is considered the most significant post-election gain since a 4.5% rise in November 1896, according to Dow Jones Market Data. Also experiencing a rally were the S&P 500 and the Nasdaq Composite which increased by 2.5% and 3% respectively, with all three indexes concluding the monumental day with record closing highs.
Stock Market Surge
The notorious Trump trade came into full swing post election, with some stocks benefitting more than others. A renewed risk appetite was seen in the marketplace as a tech-heavy Nasdaq Composite experienced an addition of 3% to stand at 18,983 and the small-cap Russell 2000 impressed with an almost 6% increase. Dow Jones also experienced an impressive surge of 3.6% or 1,508 points, reaching 43,729, while S&P 500 increased by 2.5% to arrive at 5,929. Financial stocks emerged as the biggest winners in terms of sector level performance, followed by energy and industrials, with only the real estate, consumer staples and utilities sectors finishing in the red.
Dow Jones
Names like Goldman Sachs and JPMorgan Chase showcased remarkable performance among the Dow with gains of 13.1% and 11.6% respectively. American Express, also one of Warren Buffet’s top stocks, rose by 7%. The Trump Media & Technology Group was also in the green, experiencing a rise of 5.8% during the trading session. The S&P 500 saw Discover Financial Services and Synchrony Financial leading the charge with gains of 20.1% and 18.8% respectively. In the sector of industrial stocks, Tesla’s performance stood out with its stock rallying by 14.8%, gaining nearly $120 billion in market cap. The wider industry views Trump’s presidency as a potential boon for Tesla, despite challenges for the broader Electric Vehicle (EV) industry.
Financial Stocks
As the financial markets digested the election outcome, they were largely unphased by the Federal Open Market Committee (FOMC) meetings. Compared to the pre-meeting anxiety that is usually associated with such events, the market seemed more focused on the election fallout. However, market watchers are confident that the FOMC will introduce another quarter-point cut to the short-term federal funds rate. Futures traders put a 98% probability of this rate cut happening according to the CME Group’s FedWatch Tool. Regardless, market experts are looking forward to Fed Chair Jerome Powell’s post-statement press conference for more concrete action.
