Friday, November 22, 2024

Trump’s win, Dow’s surge, Musk’s bet, and the Mag 7: What Wall Street is saying

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Another four-year stay at the White House confirmed.

Former President Donald Trump has won a second term as president of the United States after a strong showing at the polls. He will be the nation’s 47th president.

Importantly, Trump won the key battleground states of Pennsylvania, Georgia, and North Carolina. A confirmed win in Wisconsin — another swing state — put Trump over the top, with 277 electoral college votes as of early Wednesday.

Republicans are also set to take control of the Senate for the first time in four years following key wins in West Virginia and Ohio. Control of the House remained in the balance on Wednesday afternoon.

The Dow Jones Industrial Average (^DJI) skyrocketed more than 1,300 points to a record 43,569 by midday as investors raced to price in tax cuts, among other policies Trump has floated. Strong gains were also notched on the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC).

“I don’t know that it’s too much too soon,” Truist co-chief investment officer Keith Lerner said on Yahoo Finance’s Opening Bid podcast (video above; listen in below). “If you think about it coming into this [election], there was a real contention between the [outcomes]. So once you gain some clarity, and it looks like this won’t extend or be a contested election, there’s a relief rally.”

Trump’s round two has unleashed a host of key trades too.

Tesla stock (TSLA) surged 14% to $286 during the session. The company’s ticker page was the most active on Yahoo Finance through midday.

The win could put Tesla CEO Elon Musk in the pole position to shape electric vehicles’ future given his strong backing of Trump.

“Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the US market over the coming years,” Wedbush analyst and Tesla bull Dan Ives wrote in a client note.

Bitcoin (BTC-USD) prices are also moving higher, with Trump promising during his campaign to make the US a digital currency superpower. The move also likely reflects an investor bet on an SEC shakeup that could result in a more digital asset-friendly chairman.

“With Trump leading the US presidential race and GOP likely to flip the Senate, we believe the regulatory headwind for crypto has turned into a tailwind and the market is nowhere close to factoring in this shift,” Bernstein analyst Gautam Chhugani said.

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