Following Donald Trump’s surprising victory in the US presidential election, Wall Street stocks soared to a record high, accompanied by a rally in the dollar. Investors scrambled to adjust their portfolios in anticipation of potential shifts in trade policies and tax cuts under the new administration.
On Wednesday, the S&P 500 index experienced its largest single-day gain in two years, closing 2.5% higher, while the Nasdaq Composite surged 3%. The Russell 2000 index, which tracks small-cap stocks, saw a significant jump of 5.8% as investors showed confidence in a potentially faster-growing US economy benefiting a wide range of sectors.
The dollar also saw a substantial increase, marking its most significant surge in two years. Traders embraced the “Trump trades,” expecting the president-elect’s proposed economic plans to drive stock market growth, elevate inflation rates, and potentially slow down interest rate cuts.
By early afternoon in New York, the dollar index, measuring the currency against a basket of competitors, had risen by 1.6%, poised for its most substantial one-day increase since September 2022.