US benchmark equity indexes surged intraday as Donald Trump won the presidential election. The Dow Jones Industrial Average was up 3.4% at 43,654.4 after midday Wednesday, while the Nasdaq Composite jumped 2.6% to 18,924.3. The S&P 500 rose 2.3% to 5,914.8. Among sectors, financials saw the biggest gain, up 6%, while real estate saw the steepest decline. Trump, the Republican nominee, defeated Kamala Harris, vice president and the Democratic candidate during Tuesday’s general election.
Trump's return to the White House will have investors watching the impact of potential new tariffs, the labor market effects of immigration cuts, and benefits to top technology firms, analysts pointed out. "US large-cap equities could benefit from a combination of deregulation and potentially additional tax cuts," remarked Wells Fargo Investment Institute.
"Smaller, domestic-oriented companies should find an advantage from tariffs on imports." The US 10-year yield advanced 11.8 basis points to 4.41% intraday, while the two-year rate gained 5.5 basis points to 4.26%. The Federal Reserve's two-day monetary policy meeting commenced, with markets widely expecting the central bank's Federal Open Market Committee to reduce interest rates by 25 basis points Thursday, as indicated by the CME FedWatch tool. "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," noted Stifel in a Wednesday report to clients. In corporate news, Tesla (TSLA) shares soared nearly 15%, the number one performer on the Nasdaq and among the best on the S&P 500, driven by the election results that suggests the electric vehicle manufacturer stands to benefit from Trump's return to the presidency.
Goldman Sachs (GS) and JPMorgan Chase (JPM) stocks leapt 13% and 11%, respectively, becoming the leading gainers on the Dow. Super Micro Computer (SMCI) faced the worst performance on both the S&P 500 and the Nasdaq, dropping 23%. Late Tuesday, the artificial intelligence server producer provided interim financial information for its fiscal first quarter and confirmed that a committee investigating accounting firm Ernst & Young's concerns about governance found no evidence of fraud or misconduct. International Flavors & Fragrances (IFF) shares were down 11% intraday Wednesday, among the largest declines on the S&P 500.
The company had reported third-quarter adjusted earnings that disappointingly fell short of Wall Street's expectations. Qualcomm (QCOM), Arm Holdings (ARM), and McKesson (MCK) are set to report their results after the closing bell on Wednesday. West Texas Intermediate crude oil dipped 0.1% to $71.92 a barrel intraday.
In other economic news, mortgage applications in the US declined for the sixth consecutive week as rates for 30-year fixed mortgage types rose, according to the Mortgage Bankers Association. Gold futures retreated 2.7% to $2,676.2 per troy ounce, and silver experienced a 4.4% decrease to $31.34 per ounce..