Trump's Return to the White House Fuels Market Rally

Insights — Trump's re-election has sparked a surge in financial markets. On Wednesday, S&P 500 futures rose 2%, the US dollar strengthened, and Bitcoin briefly hit a record high.

"Trump Trade"

The "Trump Trade" has been a key market theme this year, and Trump's victory offers fresh opportunities. Trump Media & Technology Group has been a standout, with shares once soaring from under $12 to nearly $55 since late September, a 360% gain.

Tesla is also seen as a potential beneficiary, with CEO Elon Musk, a major Trump supporter, donating nearly $75 million to his campaign. After Trump referred to Musk as a "new star" in his victory speech, Tesla shares jumped 15% on Wednesday.

Other Trump-linked stocks include Rumble, a conservative social platform hosting DJT’s content, and Phunware, which developed mobile apps for Trump’s 2020 campaign. 

Trump’s policies—supporting traditional energy, promoting AI, and deregulation—are expected to boost sectors like energy, finance, and tech, while pressuring renewables. On Wednesday, the S&P 500 Banks Index rose 11%, United States Steel and Caterpillar gained over 8%, and Chevron climbed 3%.

Bitcoin

Bitcoin surged to a record $75,999.04, as Trump’s pro-crypto stance contrasts with Biden’s regulatory crackdown. Trump has pledged to make the U.S. a "global Bitcoin superpower."

Bernstein analyst Gautam Chhugani forecasts Bitcoin could hit $200,000 by 2025, driven by U.S. fiscal imbalances, rising debt, and monetary expansion.

Gold

Citi Research noted that gold typically underperforms after U.S. elections. Following Trump’s 2016 win, gold dropped 8% within a month. On Wednesday, spot gold closed lower at $2,658.

However, structural drivers for a gold bull market remain, including high U.S. interest rates, a deteriorating labor market, and continued demand growth for global gold ETFs. From a trade policy standpoint, Trump's proposed tariffs could weigh on U.S. economic growth, similar to 2019, leading to increased allocations to gold assets and potentially higher gold prices.

U.S. Dollar

The U.S. dollar posted its largest single-day gain in eight years on Wednesday, up 3.8% year-to-date, reaching a four-month high.

"A Trump administration means more spending, a hotter economy, and higher trade barriers—all bullish for the dollar," said Helen Given, Associate Director at Monex USA.

Jefferies' Brad Bechtel noted that under a "red sweep" scenario, the dollar could rise another 5%, with more gains likely as Trump's policies take effect.