Global markets responded to the apparent victory of former President Donald Trump early Wednesday with a mix of fear and anticipation, as the presumptive winner’s proposed economic policies promise smooth sailing for U.S. equities and a rough ride for emerging economies, as well as an intensified trade war with China.
The biggest U.S. index was up in pre-market trading, a sign that Trump’s plans to slash regulation and cut taxes are seen as good for business in the short run at least, and the dollar gained strength against most major currencies. Asian stock markets reacted in disparate ways, with Japan’s blue-chip Nikkei index up more than 2 percent, mirrored to a lesser extent by India’s main board, while Shanghai’s composite index slipped a bit, much as the renminbi did against the dollar, a slide mirrored by most smaller economies that stand to bear the brunt of a renewed push for U.S. tariffs and further hurdles to global trade. Iran’s currency, meanwhile, nosedived at the prospect of Trump 2.0.
Global markets responded to the apparent victory of former President Donald Trump early Wednesday with a mix of fear and anticipation, as the presumptive winner’s proposed economic policies promise smooth sailing for U.S. equities and a rough ride for emerging economies, as well as an intensified trade war with China.
The biggest U.S. index was up in pre-market trading, a sign that Trump’s plans to slash regulation and cut taxes are seen as good for business in the short run at least, and the dollar gained strength against most major currencies. Asian stock markets reacted in disparate ways, with Japan’s blue-chip Nikkei index up more than 2 percent, mirrored to a lesser extent by India’s main board, while Shanghai’s composite index slipped a bit, much as the renminbi did against the dollar, a slide mirrored by most smaller economies that stand to bear the brunt of a renewed push for U.S. tariffs and further hurdles to global trade. Iran’s currency, meanwhile, nosedived at the prospect of Trump 2.0.
Trump’s stunning result—he declared victory around 2:30 a.m., and appears poised to have control of both house of Congress—left other markets wrestling with a mixture of bullishness and sangfroid. Big cryptocurrencies, such as Bitcoin, jumped to new highs on the expectations that Trump’s economic playbook will mean bigger deficits, lower interest rates, and higher inflation; that makes alternative assets such as cryptocurrencies more appealing.
The oil market, a proxy for investors’ fear of geopolitical risk, took Trump’s dominance in stride, with prices for both U.S. and Brent crude slipping slightly in pre-market trading, a sign that the next U.S. administration will pursue an oil-friendly energy policy without stoking further conflict in the Middle East.
This post is part of FP’s live coverage with global updates and analysis throughout the U.S. election. Follow along here.