Tech Stocks Soar as Post-Election "Trump Trades" Drive $18 Billion ETF Surge

The recent surge of interest in U.S. election results has sparked a substantial influx into U.S. stock ETFs, with an eye-catching $18 billion flowing in the day after the elections. The so-called "Trump trades," characterized by aggressive post-election stock purchasing, are believed to be behind this investment wave.

The day after the election saw the major U.S. indices all break records, with the Dow Jones soaring by 3.57%, the Nasdaq up by 2.95%, and the S&P 500 climbing by 2.53%. The Nasdaq 100 index increased by 2.74%, closing at an all-time high of 20,781.33. This rally in stocks was supported by strong performances from major technology companies, with Tesla jumping over 14% and Intel over 7%. Other big names like Nvidia, Google, and Amazon saw rises of around 4%, while Netflix and Microsoft increased by more than 2%, showing robust investor confidence in tech giants.

Several factors are driving these movements. Analysts highlight that the conclusion of the election helps remove market uncertainty, particularly benefiting the technology sector, which has been pivotal in the economic landscape. However, former President Trump's distinct approach could foster new uncertainties. Despite these concerns, the fundamentals of tech companies remain solid, especially under the assumption of a soft economic landing. This underpins a positive outlook for the tech sector over the next 12 months, based on its ongoing earnings cycle.

The continued flow of capital into Nasdaq-linked ETFs illustrates investors' strategic positioning in the tech-heavy index. For instance, the Nasdaq 100 ETF recently closed up by 3.65%. This ETF, among others, has seen notable capital inflow in the past week, demonstrating sustained confidence in technology equities despite broader market uncertainties.