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Wall Street hits record high after Trump wins presidency
It was a monster day on Wall Street after Donald Trump was declared the winner in the presidential election.
CHICAGO - It was a monster day on Wall Street as the Dow reacted to the election of Donald Trump by climbing 1,508 points. The tech-heavy NASDAQ Index was up by more 544 points.
So, what impact will a second Trump presidency have on the U.S. economy? It depends on who you talk to.
"I mean we're seeing a euphoric move in the markets. A big, huge up in the stock market," said financial analyst Phil Flynn. "Billions of dollars poured into the U.S. markets the day after the election."
Flynn said many people are selling assets like gold to invest in stocks.
"Because ahead of the election they were concerned about the state of the stock market. They were concerned that if Kamala Harris won there'd be crazy taxes," Flynn said.
The biggest gainers were financial companies like banks, energy companies and Tesla, which is run by Trump supporter Elon Musk.
But other economists said the market was also reacting to political certainty.
"They like the fact that the election was resolved," said DePaul University financial economist Pavel Savor. "The big worry for markets was that the election would not be resolved by today. There'd be uncertainty. Markets really like uncertainty."
As for the broader economy, which is not always reflected by the financial markets, Trump's victory almost ensures an extension of the massive tax cut package enacted in 2017 which some economists argue will explode the budget deficit.
"If you cut taxes, all else equal deficits are going to grow if you don't cut spending correspondingly," said Savor, who added the cuts could also spur economic investment in the longer term.
And while many analysts worry that Trump’s proposed tariffs on foreign goods will increase inflation, some say it could also put competitors on notice.
"What he's doing is sending a message to places like China that have taken advantage of the United States for years and years and years," said Flynn. "Saying ‘listen, this is what we can do if you don't come to the table and negotiate.’"
As for Trump's threat to deport millions of people living in the United States illegally, some economists say that, too, will trigger inflation. While others argue it will open up opportunities for American workers.
And the Trump victory also turbocharged the price of cryptocurrency, which Trump once called a "scam."
"I think the perception now is he has become friendlier towards crypto than in the past. He certainly made comments that are much friendlier towards crypto."