11/17/24
The Markets' Response to Trump's Win
Author: Dhruv Kumar
Editor: David Sun
Within days of Trump’s win over Harris, the markets are booming. The S&P 500 reached over $6,000, and the Dow was above $44,000 both happening for the first time. The Dow Jones Industrial Average (DJIA/Dow) tracks the stock prices of the 30 most prominent companies on the stock exchanges in the US. On the other hand, the S&P 500 (The Standard and Poor’s 500) tracks the performance of 500 large U.S. companies across various industries, weighted by their market capitalizations, to provide a broad measure of the overall stock market's health and trends.
Now the question is why? Why is all of this happening? This is all happening due to market optimism around Trump's pro-business policy promises. Some factors include his proposed corporate tax cuts, which are anticipated to boost corporate profits, particularly benefiting companies in sectors like financial services. Additionally, Trump's supportive stance on cryptocurrencies, including potential regulatory easing, has fueled gains in Bitcoin — which hit an all-time high of over $90,000 — and other digital assets.
During Trump’s campaigns, one key endorsement came from Tesla's CEO, Elon Musk. There is increasing speculation that President Trump’s return to the White House could positively impact Tesla, with Musk, a prominent supporter of Trump’s campaign, contributing around $130 million. So far since the elections, Tesla peaked with a stock price of $358, a drastic surge. Just a few days back, Trump appointed Elon Musk and Vivek Ramaswamy to lead the new Department of Government Efficiency (DOGE), which could be pivotal for Tesla. Additionally, as the new department has an acronym of DOGE, it led to rapid interest and speculation, causing the stock to increase drastically. Overall, Trump's win had a critical effect on the economy.