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Wall Street celebrated President-elect Donald Trump’s White House victory with a remarkable surge in stock prices. The U.S. market experienced its fifth-best single-day performance, with a staggering $1.62 trillion increase in capitalization on Wednesday, as reported by The Wall Street Journal.
This financial euphoria followed Trump’s victory over Vice President Kamala Harris in the presidential election. The financial sector is optimistic about the prospect of tax reductions, deregulation, and economic growth during Trump’s second term.
BREAKING 🚨 The U.S. stock market has hit an all-time high as investors flood the market on Trumps Victory. pic.twitter.com/wLzsfqtuql
— The Patriot Oasis™ (@ThePatriotOasis) November 6, 2024
Jack Ablin, chief investment officer at Cresset Capital in Chicago, told The Journal, “Investors are celebrating.”
One anticipated change is the expected departure of Federal Trade Commission Commissioner Lina Khan, whose tenure has frustrated executives seeking to complete tech acquisitions. Investor Carl Icahn commented to the outlet, “A lot of these mergers have been thwarted by the current administration. That’s going to change.”
The Dow Jones Industrial Average soared over 1,300 points to a record 43,569 by midday, with the S&P 500 and NASDAQ Composite also posting significant gains. Both the Dow and S&P 500 achieved their largest single-day percentage increases since November 2022.
Keith Lerner, Truist’s co-chief investment officer, suggested that simply moving past the election was reason enough for Wall Street’s upswing. He stated, “I don’t know that it’s too much, too soon. If you think about it coming into this [election], there was a real contention between the [outcomes]. So once you gain some clarity, and it looks like this won’t extend or be a contested election, there’s a relief rally.”
Trump is expected to implement policies favoring smaller government, tax cuts, and extensive deregulation for corporations and wealthy individuals. A more lenient approach to antitrust issues and reduced regulation in sectors such as banking and cryptocurrencies could potentially boost corporate profits and stimulate deal activity.
Greg Swenson breaks down the market rally as Donald Trump is projected to win the 2024 election pic.twitter.com/ANAVxvRgd9
— Mornings with Maria (@MorningsMaria) November 6, 2024
Euan Rellie, co-founder and managing partner of investment bank BDA Partners, noted, “He is pro-business and anti-regulation. His instincts are to cut taxes. All of that will help the M&A [mergers and acquisitions] market.”
The anticipation of a robust economy, increased dealmaking, and reduced regulation drove bank stocks higher on Wednesday. Goldman Sachs Chief Executive David Solomon told his staff, as reported by The Journal, “It’s clear that a new administration will bring policy changes potentially important to our business and clients.”
