This is one of the most decisive election victories by a party in US history, with the Republicans dominating the White House Senate and Congress. Markets like certainty and there this is definitely a certain result.
The US equity markets closed higher with the Dow Jones jumping 3.6%.
Amongst its 30 constituent stocks, 21 were higher, with the biggest beneficiaries being financials JP Morgan and Goldman Sachs, both up between 11.5% and 13%. Caterpillar, American Express, United Healthcare and 3M were all up between 5% and 9%.
The stocks that declined were predominantly retail-focused, including Nike and Home Depot, closing down more than 3%. Coca-Cola was down 2.6% and McDonald’s down more than 1%.
The bellwether index, the S&P 500, was up 2.4%, with 350 of the 500 stocks also in the green. Like the Dow, financials dominated. Eleven of the top 20 gainers were financial institutions.
The biggest decliners were solar-related companies with First Solar and Enphase Energy down 11% and 17% respectively. Real estate builders were also down between 4% and 6%.
The broader Russell 2000 index, which includes small company stocks, was up on average 5.8%, far outperforming the other major indices. Trump’s tax and tariff policies are seen as being most beneficial to smaller companies.
Turning now to the Magnificent 7 stocks, strong Trump advocate Elon Musk’s Tesla was up 14.75% with tech darling NVIDIA up 4.1%. This was joined by Alphabet and Amazon, also up approximately 4%. Microsoft gained 2% and Apple and Meta closed in the red.
The Aussie dollar was trading about 1% lower — 0.6565 US cents to one Australian dollar.
4.3% of Australian exports are from the US at US$12.5bn, with nearly half being food and drink related. 12% of our imports are from the US at US$32.5bn, with machinery, aircraft and other vehicles making up 40% of that value. Tariffs and taxes will be the key drivers of trade relations between Australia and the US.
Ends
About Greg Boland
Greg Boland is the Chief Strategy Officer for Tiger Brokers. His more than 35 years of specialist experience in capital markets includes exchange management, investment advisory management, surveillance and risk and compliance, operations, and governance, and he is an authority in trading systems and methodologies (including online), exchange-traded equities and derivatives, equity options, index futures and options, and financial futures.