U.S. stock index futures surged Wednesday following Donald Trump’s election as the 47th President of the United States, as Republicans appeared on course to control both the Senate and the House of Representatives.
At the start of trading, Dow Jones futures were up nearly 1,255 points, up 3%, S&P 500 futures were up 133 points, up slightly 2.3%, and Nasdaq 100 futures were up 345 points, up slightly 1.7%.
Trump Wins White House, Republicans Likely to Sweep
The Associated Press and other major news networks reported Trump as the winner of the 2024 presidential election, confirming his return to the White House. Additional early coverage indicated that Republicans had gained a majority in the Senate and were also likely to secure the House of Representatives, making a full Republican “sweep” in 2024 more probable.
“The big question for markets now is whether Trump’s victory will bring total Republican control or a divided government. If Republicans secure both houses, Trump could have more latitude to cut corporate taxes, potentially boosting investor confidence,” said Russell Shor, senior market specialist at Tradu.
Republican control of Congress—known as the “red sweep”—would make it easier for Trump to enact substantial policy changes. Trump is expected to pursue more inflationary policies due to his protectionist stances on issues from immigration to trade. This prospect boosted the dollar and Treasury yields, with the greenback reaching a four-month high.
A quick conclusion to this year’s presidential election has also relieved some uncertainty for the equity markets, especially given the turbulence that surrounded the last presidential election.
Federal Reserve Meeting in the Spotlight
Wall Street indexes rose sharply on Tuesday, recovering some recent losses as technology stocks gained, with risk appetite fueled by anticipation of a Federal Reserve rate cut at the end of the week. The S&P 500 rose 1.2%, the Nasdaq Composite gained about 1.4%, and the Dow Jones Industrial Average was up around 1%.
All three indices rebounded from the all-time highs reached in late October, which were affected by mixed earnings results from major tech companies and uncertainty about future Fed rate cuts.
The Fed is widely expected to cut interest rates by 25 basis points at the end of its two-day meeting on Thursday. Any indications of the Fed’s future rate cut plans will be closely watched, given recent signs of persistent inflation in the U.S. The central bank has emphasized a data-driven approach in deciding on future policy easing.
Crude Oil Prices Down After API Release
Oil prices declined on Wednesday after industry data indicated a rise in U.S. crude inventories, while the dollar gained on Trump’s election news. Data from the American Petroleum Institute (API) released on Tuesday showed that U.S. crude inventories increased by 3.13 million barrels last week, surpassing the expected 1.1 million-barrel increase.
Official inventory data will be released later on Wednesday, but if the API figures are confirmed, it could heighten concerns about weakening fuel demand in the U.S., especially as the winter season approaches.
