Donald Trump’s victory triggers rally in bank stocks; Tesla soars 15%, Trump Media shares triple in value since Sept

Donald Trump's second victory in the US Presidential Elections in 2024 boosted equity markets on Wednesday, November 6, driven by bets on lower corporate tax rates, favourable tariffs, and deregulation, lifting shares of banks, locally focused small-cap companies, and Trump-related stocks.

In what Trump described as the “greatest political comeback” in US history, the Republican prevailed in an unprecedented race during which he was convicted of felonies, survived two assassination attempts and crushed a challenge from Democratic candidate and Vice President Kamala Harris.

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Shares in Donald Trump’s media company surged after the Republican was elected the 47th president of the United States. Trump Media & Technology Group Corp. jumped as much as 35 per cent at the market open before trimming gains to about 12 per cent as investors gamed out how Trump’s return to the White House could impact the company.

At its peak, the advance was the largest intraday move since mid-July. The rally increased Trump’s net worth, adding about $500 million to his paper value, given that he holds a nearly 115 million share stake. The shares have more than tripled in value from their all-time lows in late September, and Trump's stake was worth as much as $5.3 billion, up from $3.9 billion on Tuesday.

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Investors grappled with the far-reaching effects of a Trump presidency, powering the US dollar higher and Bitcoin to a record. Shares of billionaire Elon Musk’s Tesla and other companies soared as they were seen benefiting from his return to the White House. Trump's promise to make Musk head of a government efficiency commission after he backed Trump throughout his electoral campaign led to a 12.5 per cent surge in Tesla's shares.

Wall Street's main indexes opened at record highs, while the small-cap Russell 2000 index jumped about 4.8 per cent to its highest in nearly three years. Wall Street lenders JPMorgan Chase, Bank of America and Goldman Sachs jumped between six per cent and 10 per cent on prospects of improving domestic investment, looser regulations and more deals.

Semiconductor stocks advanced, with the Philadelphia chip index rising 1.8 per cent and artificial intelligence (AI) darling Nvidia gaining 2.7 per cent despite Trump's criticism of the US CHIPS and Science Act, which supports domestic chip manufacturing through subsidies. 

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Trump's Republican Party also secured the Senate and made gains in the US House of Representatives, potentially making it easier for the president to legislate his policy proposals and push through key appointments. 

Import duties, including a 10 per cent universal tariff on imports from all foreign countries and a 60 per cent tariff on imports from China, are a key plank of Trump's policies and likely to have the biggest global impact.

Victory for Trump, who has positioned himself as pro-cryptocurrency, lifted Bitcoin to a record high. Crypto-linked stocks Coinbase, MicroStrategy, Riot Platforms, and MARA Holdings jumped between 11 per cent and 21 per cent.

Private prison operators Geo Group and CoreCivic jumped about more than 30 per cent each as Trump's promised crackdown on illegal immigration could boost demand for detention centers. US steel makers Cleveland-Cliffs, Steel Dynamics, and Nucor surged between 13 per cent and 19 per cent, with analysts noting in the run-up to the election that a Trump presidency may mean rising protections for the domestic steel industry.

With inputs from Bloomberg and Reuters