US markets end sharply higher after Trump wins US Presidential polls

07 Nov 2024 Evaluate

The US markets ended sharply higher with Dow Jones Industrial Average settling higher by over 1500 points after former President Trump was declared the winner in the presidential election versus Vice President Kamala Harris. Claiming victory in several key swing states, Trump is projected to win far more than the 270 Electoral College votes needed to secure his return to the White House. The decisive victory helped avoid the uncertainty that would be created by a prolonged vote counting process and potential legal challenges. Trump is also seen by the markets as better for corporations and likely to renew the tax cut package enacted during his first term, which was due to expire at the end of 2025. A Trump administration is also expected to scale back government regulations and be less hostile to mergers and acquisitions.

However, Trump has also called for increased tariffs on China and other countries, which could lead to renewed inflation concerns. On the sectoral front, financial stocks helped lead the rally on Wall Street amid optimism about reduced regulation under Trump, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index soaring by 10.7 percent and 8.2 percent, respectively. Optimism about fewer regulations also contributed to substantial strength among oil service stocks, as reflected by the 7.8 percent spike by the Philadelphia Oil Service Index. Airline stocks also showed a significant move to the upside, driving the NYSE Arca Airline Index up by 5.8 percent to its best closing level in over a year.

Dow Jones Industrial Average rose 1,508.05 points or 3.57 percent to 43,729.93, Nasdaq gained 544.29 points or 2.95 percent to 18,983.47 and S&P 500 was up by 146.28 points or 2.53 percent to 5,929.04.