Markets Respond to “Trump Trades” as Election Results Shake Global Economy

On November 6, the global financial markets surged following the election of Donald Trump as the U.S. president, with sharp increases in the U.S. dollar and historic highs for U.S. stock futures. Anticipation of tax cuts and rising interest rates under the Trump administration sparked a wave of “Trump trades” that are reshaping market expectations for traditional sectors and policy-driven shifts.

U.S. Markets Surge Post-Election

Around 11:43 AM GMT, S&P 500 futures jumped by 2.3%, while the Russell 2000 futures skyrocketed nearly 6%. The yield on the 10-year Treasury note hit a four-month peak of 4.47% before settling at 4.45%, and 30-year yields rose by 22 basis points to reach 4.669%. Bitcoin also hit a record high, reaching 75,389, while the U.S. dollar index advanced 1.6%. In Europe, the STOXX 600 index gained 1.1%, reflecting optimistic market sentiment.

Economic Reactions from Financial Leaders

Hendrik du Toit, CEO of Ninety One, commented on this new global dynamic, emphasizing that Trump’s substantial endorsement and swift policy action align with the clarity markets value. Andrea Scauri, Senior Portfolio Manager at Lemanik, echoed this, highlighting a strengthening in U.S. fiscal policy under Trump, which he believes could boost sectors like oil and heavy industry.

Sector-Specific Market Trends

Emmanuel Cau, Head of European Equity Strategy at Barclays, observed that market performance varied based on Trump’s policies, with sectors exposed to renewable energy and China lagging behind. In contrast, U.S.-based consumer sectors and dollar-linked assets are seeing notable gains.

Meanwhile, UBS’s Emmaouil Karimalis pointed out that Trump's proposed tariffs could have substantial economic implications for China and Europe, with expected slower growth in these regions. David Allen from Plato Global Alpha Fund added that the market has been seeking stability, and Trump’s victory brought a partial realization of investor expectations.

Treasury and Interest Rate Projections

Rogier Quaedvlieg from ABN AMRO Research anticipates continued interest rate hikes in the U.S., spurred by inflationary expectations tied to Trump’s economic policies. In a similar vein, Ken Peng from Citi Wealth notes that investors are betting on further tax cuts, especially with a Republican-led Congress likely to support these moves. Naka Matsuzawa of Nomura Tokyo adds that U.S. bond yields could rise further in the face of expanding fiscal measures.

Global Market Volatility and Potential Stimulus

Rong Ren Goh of Eastspring Investments forecasts heightened market volatility as Trump’s campaign promises face real-world implementation challenges. Wong Kok Hoong of Maybank is observing potential stimulus announcements aimed at mitigating the impact on regions like Hong Kong and China.

Gary Ng from Natixis warns that the proposed tariff policies and tax cuts may contribute to inflationary pressures in the U.S., which could also indirectly impact the Chinese yuan.

This election coverage was compiled by the Global Finance & Markets Breaking News team, edited by Raju Gopalakrishnan, Clarence Fernandez, and Catherine Evans, ensuring adherence to Thomson Reuters Trust Principles.