U.S. financial markets witnessed wild swings after U.S. Republican Donald Trump won the country's presidential election, but then stabilized and regained momentum as Wall Street further digested information about the country' s election results.
"It is not quite a mandate, not with a popular vote loss, but it is a far different outcome than was expected 12 hours ago," said Chris Low, chief economist at FTN Financial.
Financial markets around the world had been pricing in a victory for the Democratic nominee Hillary Clinton over Trump. Dow futures had plunged more than 800 points on Tuesday night as the U.S. presidential election remained much tighter than expected, with Trump showing strength in crucial battleground states.
However, U.S. stocks opened slightly lower Wednesday mornings as Wall Street shook off fears about the surprised U.S. election results.
At the close, all three major indices reversed early losses to post solid gains, notching a three-day winning streak.
Markets are recovering this morning in part because we have checks and balances that will prevent the most ambitious policies-including wall building and tariff imposing-from taking place unless he can build a governing coalition in Congress, something even Barack Obama struggled to do, said Chris Low.
Wall Street is benefiting from Trump's anti-regulation stance versus Clinton.
Clinton had several election measures viewed as adverse to Wall Street such as raising capital gains tax, further regulation and a high frequency trading transaction tax, Brendan Ahern, chief investment officer of U.S. fund company Kraneshares, told Xinhua.
The market is expecting adjustments to Dodd Frank, the Volker Rule and other regulations put in place over the last eight years, he added.
Other markets also saw volatile trading.
Oil price settled higher Wednesday after tumbling as much as about 4 percent on Tuesday night amid Donald Trump's winning of U.S. presidential election.
The U.S. dollar also recovered from an overnight selloff, as Trump's victory speech eased market nerves.
The dollar index, which tracks the greenback against six major peers, was up 0.71 percent to 98.553 in late trading Wednesday.
Meanwhile, Gold had surged by nearly 5 percent to a six-week high of 1,337.40 dollars an ounce as investors sought refuge in perceived safe-haven assets like gold, but then shaved gains to end mildly lower as the U.S. election jitters faded.
Analysts thought that Trump's victory may have wide implications on multiple fronts, including trade, taxes and foreign policy, among others. His win also puts into question the likelihood of a Federal Reserve rate hike.
"Over the next several weeks markets will digest how President Trump's policies will differ from Canidate Trump's rhetoric. Often there can be disparity between the two as there is often a movement toward a centrist view," Ahern said.
Latest comments