US benchmark equity indexes experienced significant gains during trading as Donald Trump secured victory in the presidential election. The Dow Jones Industrial Average surged by 3.4%, reaching 43,654.4 around midday Wednesday, while the Nasdaq Composite soared 2.6%, closing at 18,924.3. The S&P 500 also climbed by 2.3%, settling at 5,914.8.
In terms of sector performance, financial stocks led the charge with a notable 6% gain, in contrast to the real estate sector, which experienced the largest decline. Trump, representing the Republican party, triumphed over Kamala Harris, the Democratic candidate and current vice president, in the voting held on Tuesday. As Trump's return to the White House unfolds, market analysts anticipate varying impacts, particularly concerning new tariffs, immigration policy changes, and potential benefits for major tech firms.
Wells Fargo Investment Institute commented, "US large-cap equities could benefit from a combination of deregulation and potentially additional tax cuts. Smaller, domestic-oriented companies should find an advantage from tariffs on imports." In the bond market, the US 10-year yield rose by 11.8 basis points to 4.41%, while the two-year yield increased by 5.5 basis points, reaching 4.26%. Amid these developments, the Federal Reserve commenced its two-day monetary policy meeting.
Analysts expect the Federal Open Market Committee to announce a 25 basis point reduction in interest rates on Thursday, as indicated by the CME FedWatch tool. Stifel noted in a report to clients, "Following an outsized (50-basis-point) cut in September, the Fed is widely expected to continue along a path to easier money policy albeit at a reduced pace with a more tempered pace of (25-basis-point) this week." In corporate news, Tesla shares jumped nearly 15%, becoming the top performer on the Nasdaq and among the best on the S&P 500, as presidential election results bolstered expectations that the electric vehicle manufacturer would benefit from Trump's return.
Goldman Sachs and JPMorgan Chase reported share price increases of 13% and 11%, respectively, ranking among the top gainers on the Dow. Conversely, Super Micro Computer emerged as the worst performer on both the S&P 500 and Nasdaq, plummeting 23%. The AI server maker disclosed interim financial data for its fiscal first quarter and indicated that a committee investigating concerns from accounting firm Ernst & Young found no evidence of fraud or misconduct. International Flavors & Fragrances shares fell by 11% during intraday trading, marking one of the steepest declines on the S&P 500 after the company reported disappointing third-quarter adjusted earnings that failed to meet Wall Street projections. Companies like Qualcomm, Arm Holdings, and McKesson are slated to report their results after the closing bell on Wednesday. Meanwhile, in commodity news, West Texas Intermediate crude oil prices decreased by 0.1% to $71.92 per barrel.
Gold dropped 2.7% to $2,676.2 per troy ounce, while silver also faced a decline, falling 4.4% to $31.34 per ounce. Market participants are closely observing these developments for their broader economic implications, particularly in the wake of the presidential election results and evolving monetary policy..