Stocks are set to jump in early Wednesday trading, continuing the positive trend from the previous day. Futures for the major indexes suggest a robust market opening, with S&P 500 futures rising by 2.2%.
This significant momentum on Wall Street follows the declaration of former President Donald Trump as the victor in the recent presidential election against Vice President Kamala Harris. With victories in several pivotal swing states, Trump is anticipated to secure significantly more than the 270 Electoral College votes required for his return to the presidency.
The market perceives Trump as favorable for corporations, potentially reinstating the tax cut package from his initial term, originally set to expire at the end of 2025. Expectations under a Trump administration include a reduction in government regulations and a more lenient stance on mergers and acquisitions.
Conversely, Trump's proposals for increased tariffs on China and other countries could reignite inflation concerns. Neil Saunders, Managing Director of GlobalData, noted, "Tariffs and higher prices could result in sustained high interest rates, negatively impacting the housing market and associated sectors." Saunders further commented, "Although Trump has promised lower interest rates and seeks more influence over rate-setting, enacting such changes is not within his immediate capabilities."
The Republicans are also anticipated to regain control of the Senate for the first time in four years, although the House remains undecided. With the elections largely concluded, traders will focus on the Federal Reserve's monetary policy announcement slated for Thursday. The Fed is expected to reduce interest rates by 25 basis points, but the subsequent statement may affect projections for future cuts.
On Monday, stocks lacked clear direction and closed moderately lower; however, Tuesday saw a strong upward turn, led by the tech-focused Nasdaq. Major indexes closed the day off peak levels but remained solidly positive. The Nasdaq surged 259.19 points or 1.4% to 18,439.17, the S&P 500 climbed 70.07 points or 1.2% to 5,782.76, and the Dow advanced 427.28 points or 1.0% to 42,221.88.
In overseas markets, Asia-Pacific stocks displayed mixed performance on Wednesday. Japan's Nikkei 225 Index jumped 2.6%, while Hong Kong's Hang Seng Index dropped 2.2%. Meanwhile, significant European markets have all moved upwards for the day, with Germany's DAX Index rising 0.3% and both the French CAC 40 Index and the U.K.'s FTSE 100 Index increasing by 0.8%.
In commodities, crude oil futures fell by $1.92 to $70.07 per barrel after a $0.52 rise on Tuesday to $71.99. Gold is trading at $2,688.70 per ounce, down $61 from the previous closing price of $2,749.70. On Tuesday, gold modestly increased by $3.50.
On the currency market, the U.S. dollar is trading at 154.15 yen, compared to 151.62 yen at Tuesday's New York close. Against the euro, the dollar is at $1.0710, down from $1.0930 the previous day.
