Wall Street and bitcoin rallied to fresh record highs and the dollar soared after Donald Trump’s victory in the US presidential election, while renewable energy stocks fell.
Trump was declared the winner on Wednesday morning after securing the 270 electoral votes needed to take the presidency.
The Republicans also grabbed a majority in the Senate and the House of Representatives, giving Trump sweeping powers to cut taxes and impose tariffs on imported goods, which was also judged as a positive for the US currency.
When New York opened for trading on Wednesday, the benchmark S&P 500 rose 2.1%, the Dow Jones industrial average increased 3.1%, and tech-focused Nasdaq composite climbed 2.1% – all hitting all-time records.
“That’s the Trump trade,” Marta Norton, chief investment strategist at Empower Investments, told CNBC. “There’s a lot of emotion, there’s a lot of euphoria, based on perspective in markets today. And I think that doesn’t necessarily mean that’s the way markets are going to trade in perpetuity.”
Shares in the former president and president-elect’s own Trump Media & Technology Group, hours after revealing another heavy quarterly loss, increased by as much as 30% before losing ground in another volatile rally.
The dollar’s climb began after very early indications of a Republican win in Georgia and gathered pace throughout the day.
The dollar index – which measures the currency against six major peers including the euro and yen – advanced 1.25%, having earlier hit a four-month peak.
Trump’s tariff and immigration policies were seen as inflationary by analysts, buoying up the dollar.
Bitcoin climbed as much as 9% at one point to reach a record $75,389, before falling back to below $74,000. Trump is seen as more actively supportive of cryptocurrencies than Harris.
The FTSE 100, which includes many large international companies that earn their revenues in dollars, rose by more than 1% to 8270.94.
US stock markets are expected to follow the same upward path when they open later, despite concerns that higher inflation would force the US Federal Reserve to scrap plans to cut interest rates, keeping them higher than previously expected.
Federal Reserve officials will begin a two-day meeting in Washington on Wednesday to decide whether to cut interest rates, with a decision due at 7pm GMT on Thursday. The Bank of England is expected to announce a rate cut on Thursday, before the Fed announces its decision.
James Knightley, the chief international economist at ING, said lower taxes after a Trump victory should boost consumer and business sentiment and lift spending in the near term. “However, promised tariffs, immigration controls and higher borrowing costs will increasingly become headwinds through his presidential term,” he said.
Among the early winners in pre-US stock market trading was Trump’s media business, TMTG. Its shares rose by more than a third to $34.
A surprise stock market filing as the first polls closed showed TMTG, which hosts the Truth Social rival to X, formerly Twitter, suffered a decline in income of almost 6% to $1m in the three months to 30 September, while net losses narrowed to $19.2m from $26m in the same period of last year.
However, investors expect the prospects of the company, which is dwarfed by other social media platforms, to improve once its main shareholder is installed in the White House.
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Shares in Elon Musk’s electric carmarker Tesla rose 14% in pre-market trading. Musk was one of Trump’s more vocal supporters in the election.
The dollar jumped as much as 3.36% to 20.7720 Mexican pesos, a more than two-year high. It rose as much as 1.23% to 7.1860 yuan in offshore trading for the first time in almost three months. Mexico and China are among countries that stand to be hit hardest by Trump tariffs.
The euro fell as much as 1.92% to $1.0719 for the first time since 2 July. Sterling slipped as much as 1.35% to $1.2865. The dollar added as much as 1.8% to 154.34 yen, the highest since 30 July.
The Australian dollar fell to its lowest since August as the US election results came in on Wednesday, and was down by 1% at ¢65.66 after Trump’s victory was declared.
Trump has pledged to boost US oil production and reportedly offered to tear up environmental regulations if oil companies supported his campaign, and has also called wind energy “bullshit” and “disgusting”.
Renewable energy stocks fell after Trump’s victory became clear. Shares in Germany’s Nordex, which designs, sells and manufactures wind turbines, fell 6.4%, Vestas Wind Systems, the Danish wind turbine maker, dropped by 8%. In the UK, the clean technology business Ceres Power fell by 3.5% while shares in ITM Power, the Sheffield-based energy storage and clean fuel company, are down 6%.
The equipment rental company Ashtead, which benefits from a stronger US economy, was the top riser on the FTSE 100 share index, up 6.6%, followed by Intercontinental Hotels, which rose 5%, and the manufacturing firm Rolls-Royce, up 4.6%.
Deutsche Bank analysts wrote in a research note: “A potential unified government under President Trump would have the greatest degree of freedom for fiscal policy and would likely be the most dollar bullish outcome. But even without control of Congress, a Trump victory would be decidedly dollar bullish via the impact of tariffs.”
They added that the dollar should “especially outperform against high-beta currencies”, such as the Mexican peso and Australian dollar.