Major stock indexes soared Wednesday in the wake of Donald Trump's decisive victory in Tuesday's presidential election.
The Dow Jones Industrial Average gained more than 1,500 points, or 3.6%, hitting an all-time high. The last time the Dow, which represents larger, more established firms, jumped 1,000 points in a single day was in November 2022.
The S&P 500 closed up 2.5%, and the tech-heavy Nasdaq climbed 3%, both hitting all-time highs.
NBC News projects Trump to gain at least 291 Electoral College votes in his defeat of Vice President Kamala Harris, his Democratic opponent. Republicans are also poised to earn a majority in the Senate, while the House remains too close to call.
Trump has promised to extend or enact sweeping tax cuts and deregulatory policies that are widely supported across the business community. For now, that is pushing markets higher.
"Investor sentiment is pro-growth, pro-deregulation, and pro-markets, as seen in the overnight market action," said David Bahnsen, chief investment officer of the Bahnsen Group, in a note to clients. "There is also an assumption that (merger and acquisition) activity will pickup and that more tax cuts are coming or the existing ones will be extended. This creates a strong backdrop for stocks."
Shares in major banks, which are often the beneficiaries of increased M&A activity, experienced large increases, with JPMorgan up 11.5%, Bank of America up 8.4% and Wells Fargo up 13%.
The gains also trickled down to the Russell 2000 index, which represents smaller companies. That benchmark jumped 5.8%.
History also predicts a brighter year ahead for stocks following an election year: According to Isaac Boltansky, managing director and director of policy research at BTIG, the S&P 500 finished higher in nine of the last 11 years in which a president has been sworn in.
"Of course, there are acute sector considerations and there are broader macroeconomic implications, but in general the U.S. economy continues to march forward," Boltansky wrote in a note Wednesday.
Alongside the stock surges were signs that investors are also bracing for an increase in inflation and widening deficits. Investors sold off bonds, causing the 10-year Treasury note yield to rise 17 basis points. When inflation expectations increase, bonds tend to become less valuable if interest rates must also rise.
Oil prices fell, too, as the U.S. dollar soared, on the expectation that Trump's promise to increase tariffs would end up reducing U.S. imports. A USD benchmark index had its largest one-day increase since at least 2020.
That represents market pushback on one of Trump's key policy planks: A weaker dollar that would support U.S. exports.
Gold prices, and those of other commodities, declined, too.
