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Trump's Trade Accelerating Overnight as Former President Nears Home Run Win; DJT, BTC, and Tesla All Go Crazy

AInvestWednesday, Nov 6, 2024 2:18 am ET
1min read

Trump's victory for U.S. President is much closer now, and the market is celebrating. Nasdaq futures and S&P 500 both jumped 1.5%, and Trump's trade is accelerating, with DJT surging 44% overnight. Musk-backed Tesla jumped 13% in after-market trading, and Bitcoin surged to $75,000, a new all-time high.

As of around 2 p.m. ET, Trump led Vice President Kamala Harris 266-188 in the electoral college, according to CNN. The focus is on key battleground states, and they are leaning towards Trump victory. Polymarket believes Trump's odds are over 99%. The former president has already won swing states of North Carolina, Georgia and Pennsylvania. He just needs 4 more votes to win the presidency.

Stocks directly or indirectly linked to Trump are all climbing higher. With Republicans favoring deregulation, Wall Street stocks surged overnight. JPMorgan, Citigroup, Morgan Stanley, and Goldman Sachs jumped about 5% overnight, while Bank of America and Wells Fargo added more than 4%. Energy stocks also surged, with ExxonMobil and Chevron (CVX) rising 4% and 5.6%, respectively.

"Donald Trump is the candidate where you ignore what he says and focus on what you expect him to do," TD Cowen analyst Jaret Seiberg noted. "It is why he offers the promise of deregulation for financials as his regulators are likely to roll back much of the CFPB enforcement agenda and rethink safety and soundness changes for big banks."

Steel stocks are also expected to outperform, according to JPMorgan. "A Trump 2.0 scenario would likely bring increased use of tariffs on Chinese and European imports, with the first 100 days focusing on executive authority related to energy and deregulation along with the phased introduction of tariffs," JPMorgan analyst Bill Peterson wrote in a note earlier this month. "Steels, in particular, should rally on a Trump victory, assuming greater protectionism would be bullish for U.S. steel pricing, which is already the most attractive globally due to S232 tariffs and largely domestic footprints," he added. "We also see further tariffs benefiting downstream aluminum players." Related stocks that could outperform under a Trump victory include Nucor, Cleveland-Cliffs, Kaiser Aluminum, and MP Materials.

However, not all stocks are benefiting from this potential outcome. Chinese stocks are taking a hit on Wednesday trading in Hong Kong, as concerns over a new trade war loom. The Hang Seng Tech Index fell nearly 3% at the time of writing, with Alibaba and JD losing more than 4%. The e-commerce sector could suffer the most as higher tariffs are anticipated.

Now, what's your betting stance?

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.