US Elections: Trump triumphs! What lies ahead for markets?

• Trump clinches the presidency with a decisive “red sweep”
   
• Assets linked to “Trump trades” surge following the election results
   
• Bitcoin skyrockets over ~7%, reaching a new all-time peak
   
• The US dollar dominates the foreign exchange market, recording its largest single-day increase since February 2023
   
• The Fed's decision on Thursday could instigate new market fluctuations

America has elected Republican Donald Trump as its 47th president after a closely contested battle for the White House! Trump secured 270 electoral votes and won 4 out of 7 key battleground states.

Additionally, Republicans regained control of the Senate, with the remaining potential to take over the House too.

Following the election, assets associated with the “Trump trade” have experienced significant gains, with US futures in the green, Treasury yields climbing, and Bitcoin reaching unprecedented heights.

Prior to the election, we identified several assets poised for growth in the event of a Trump victory:
 

• US Dollar: Increased by 1.7%, marking its largest one-day rise since February 2023, fueled by expectations of slower interest rate cuts from the Federal Reserve

• Bitcoin: Surged ~7% to a new record of $75,410, as cryptocurrency supporters celebrated a pro-crypto administration

• RUS2000 Index: Futures rose nearly 6%, benefiting small businesses from Trump’s protectionist policies

Conversely, certain assets may suffer due to Trump’s return to the presidency:

• Gold: Declined by 1.19% due to a stronger dollar and rising Treasury yields
   
• Chinese and European Stock Indices: Experienced declines amid renewed trade tensions and concerns over proposed tariffs

Trump’s presidency is likely to shape market dynamics for the coming years, with the USD, Bitcoin, and other “Trump trade” assets emerging as primary beneficiaries.
 

Do not overlook!

As the Federal Reserve meets on Thursday, traders are anticipating a 25-basis point cut in interest rates, but the election outcome may influence future decisions.
 

Monitoring the US dollar and gold will be crucial as markets react to both political developments and monetary policy shifts.