By Suzanne McGee, Carolina Mandl and Cynthia Kim
NEW YORK/SEOUL (Reuters) – Investors bought dollars, bitcoin and stocks and sold bonds as Donald Trump claimed victory in the U.S. presidential election and Republicans took control of at least one chamber of Congress.
U.S. stock futures hit record highs, the dollar rose and Treasury yields rose, while bitcoin breached $75,000 for the first time – all moves that investors see as likely if Trump were to win against Democrat Kamala Harris.
“Not only are markets positioning for a comfortable Trump victory in the Electoral College, but also for the prospect of a Republican-controlled Congress,” said Matthew Ryan, head of market strategy at Ebury.
The results so far underscore how one of the most unusual presidential elections in modern American history could have far-reaching consequences for tax and trade policies and American institutions.
The results impact global assets and will determine the outlook for U.S. debt, the strength of the dollar and many of the industries that form the backbone of American business.
Leading up to Tuesday, polls showed a dead heat between the former president and the current vice president. But according to Edison Research, as of 2 a.m. ET, Trump had won the swing states of North Carolina and Georgia and was leading in several others.
Fox News predicted he had won the presidency.
Republicans have also won control of the US Senate, ensuring they will dominate at least one chamber of Congress next year.
GROWING CONFIDENCE
Assets whose prices could be helped by Trump’s promises to raise tariffs, cut taxes and cut regulations shone, as dealers said money flowed out of emerging markets and U.S. Treasury bonds tumbled in anticipation of a ballooning deficit.
“The result is a higher yield path,” said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.
He bought bank stocks from the Asia-Pacific region on the expectation that higher yields and stronger growth would help their profits.
Bank shares rose 4.4% in Tokyo, outperforming the market in Australia.
The yield on ten-year government bonds – which moves inversely to prices – flirted with almost 4.5%.
“Much of this is based on investors’ perception that Trump would cut taxes or at least keep tax rates low. Now that it probably looks like a red line (from the White House and Congress) – additional reductions are possible.” said Ken Peng, head of Asia investment strategy at Citi Wealth in Hong Kong.
“Deregulation is another major positive for the economy and markets, especially for the financial, energy and technology sectors,” he said.
rose to a record high, betting on a softer line on cryptocurrency regulation.
‘VOLATILE NIGHT’
Sectors exposed to tariffs fared less well. The Mexican peso, which could be hit by tariffs, fell to its lowest level in two years, about 3% weaker than the previous session’s close.
The euro headed for its biggest one-day drop since 2020 and German government bond yields saw their biggest one-day fall since January as investors priced in a sharp slowdown in the economy.
In Asia, shares of Hong Kong exporters fell, dropping 2.7% and leaving investors facing a bumpy future.
“With Trump, market volatility is likely to increase,” said Rong Ren Goh, portfolio manager at Eastspring Investments in Singapore.
“Right now, markets are narrowly focused on the prospect of tariffs because it is the easiest leverage to pull,” he said, but a broader trade conflict was possible. “From this perspective, I think a foreign investor is likely to position itself more defensively against China-oriented risks.”
Tesla (NASDAQ:) shares rose sharply in Frankfurt ahead of the US premarket. Elon Musk, Tesla’s largest shareholder, supported Trump during his election campaign.
Shares of Trump Media and Technology Group rose 10% in extended trading.
Elsewhere, some bankers, investors and analysts said they were waiting – in some cases anxiously – with friends and family for the count.
Joe McCann, CEO of Asymmetric, a macro hedge fund that trades primarily in cryptocurrencies, said he has been watching election news on several TV screens and monitoring market movements in his 50th floor penthouse in Miami.
“We haven’t left this room all day,” he said. “We expect a volatile night.”
