Stock futures in the US jumped up sharply overnight as Donald Trump’s victory in the 2024 presidential election became increasingly likely.
Trump notched up a number of significant early wins and secured key swing states North Carolina and Georgia, though the race was still not officially called as of Wednesday morning.
Despite this, futures on the Dow Jones Industrial Average added around 550 points, or about 1.3 percent.
S&P 500 futures gained 1.1 percent and Nasdaq 100 futures rose 1 percent.
Futures are derivative contracts to buy or sell an asset at a future date at an agreed-upon price.
Bitcoin also jumped to a record high, and the US dollar — which was expected to improve should Trump return to the White House – rallied against other global currencies.
Shares of Trump Media & Technology Group, a social media company closely tied to the candidate and the parent company of his platform Truth Social, surged 40 percent in overnight trading on the Robinhood brokerage platform.
Some investors, including Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, had suggested not getting caught up in pre-election moves, or even those immediately after the polls close that may “face inevitable tempering, if not outright reversals, either before or after Inauguration Day.”
Analysts generally assume Trump’s plans for restricted immigration, tax cuts and sweeping tariffs would put more upward pressure on inflation and bond yields, than Harris’s center-left policies.
Trump’s proposals would also tend to push up the dollar and potentially limit how far US interest rates might ultimately be lowered.
“As the early results come in, even though none of them are that surprising, we are seeing Treasury yields rising a little bit, the dollar strengthening, bitcoin up; kind of a classic Trump trade,” said Brian Jacobsen, chief economist at Annex Wealth Management.