Wall Street soared and the dollar posted its largest gain in eight years as Donald Trump secured a second term in a historic re-election win. Investors rallied behind Trump’s promised economic policies, leading to substantial gains across the board. Bitcoin also hit a new all-time high as the cryptocurrency gained support from Trump’s pro-crypto stance, marking a sharp contrast with the previous administration’s regulatory approach.
In the wake of Trump’s re-election, major U.S. stock indexes surged. Banks, in particular, saw remarkable gains due to expectations that Trump’s economic policies would keep interest rates elevated for an extended period, offering better returns on dollar-based assets. With the U.S. dollar climbing 1.65% against major currencies, this sentiment drove the pound down 1.16%, marking its lowest point since August. The Euro also dropped 1.89%, reflecting global investor responses to Trump’s proposed economic changes.
In Europe, the FTSE 100, which includes the UK’s largest companies, experienced early gains before leveling off by day’s end. Meanwhile, Germany’s DAX and France’s CAC 40 indices closed lower as European markets weighed the potential impacts of Trump’s trade policies. In Asia, Japan’s Nikkei 225 saw a 2.6% increase, while China’s Shanghai Composite and Hong Kong’s Hang Seng indexes dipped slightly, mirroring concerns around U.S. trade tariffs.
Bitcoin soared over $6,600, reaching a new peak of $75,999.04. Trump’s position on cryptocurrency, which aligns closely with prominent industry advocates, signals potential leniency and encouragement for the sector. Trump’s campaign included discussions on appointing pro-crypto figures to influential regulatory positions and possibly dismissing SEC Chair Gary Gensler, whose regulatory actions were seen as restrictive by some in the crypto industry. Tesla shares also jumped more than 14% following Trump’s win, in part due to speculation about Elon Musk’s potential involvement in government fiscal audits.
Trump’s re-election brings new momentum to trade discussions, especially concerning China. His pledge to increase tariffs has raised concerns about the impact on global trade. UK Chancellor Rachel Reeves remarked that the UK would make “strong representations” to promote free trade between the U.S. and its allies, emphasizing that open markets benefit all participants. Economists have noted that the UK’s economy may be significantly impacted, with projections for 2025 economic growth downgraded from 1.2% to 0.4%.
Asia is particularly wary of Trump’s protectionist policies. Katrina Ell from Moody’s Analytics emphasized the potential for disruption in the region’s export-based economies. Investors are also on edge over Trump’s stance on Taiwan, a key chip supplier, adding further uncertainty.
The Federal Reserve’s upcoming announcement on interest rates is also in focus, with global markets watching closely for insights into potential rate changes and commentary from Fed Chair Jerome Powell.
For more details, read the full article on the BBC News website.