US stocks gained significantly today, with their major indices closing at new record highs. The US dollar also recorded a significant rise, climbing to four-month highs. Financial markets reacted to the victory of Republican candidate Donald Trump in the presidential election.
Promises of deregulation
The Dow Jones index, which includes shares of thirty leading US companies, gained 3.57 per cent to end trading at 43,729.93 points. The broader S&P 500 index rose 2.53 percent to 5,929.04 points and the Nasdaq Composite index, which includes many companies in the high-tech sector, was up 2.95 percent to 18,983.46 points.
Investors are hoping for things like tax cuts and deregulation from Trump. “There is relief that the election result was quick and unquestioned,” said analyst David Morrison of Trade Nation. “Trump’s victory is seen as very positive for US businesses because of his promises on tax cuts and deregulation,” he added.
Shares of Trump’s media company, Trump Media & Technology Group, in which Trump has a majority stake, gained about six percent today. Shares in electric car maker Tesla, headed by billionaire Elon Musk, who supported Trump during the election campaign, gained nearly 15 percent. Shares of banking companies, which investors say could benefit from less regulation, also gained significantly. Shares of JPMorgan Chase, the largest US bank, gained almost 12 percent.
Economic outlook
Trump’s plans to curb illegal immigration, introduce new tariffs, cut taxes and deregulate could boost economic growth and inflation, analysts said. This would limit the ability of the US Federal Reserve (Fed) to cut interest rates, which would be favorable for the dollar.
It is widely expected that the Fed will cut its key interest rate by a quarter percentage point to a range of 4.50 to 4.75 percent on Thursday. In September, the central bank took its first interest rate cut in more than four years when it cut its benchmark rate by half a percentage point.
Source: Czech Press Office
