What Wall Street Says

On November 7, 2024By Littum

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Another four-year stay in the White House confirmed.

Former President Donald Trump has won a second term as President of the United States after a strong showing at the polls. He will be the country’s 47th president.

Importantly, Trump won the key battleground states of Pennsylvania, Georgia and North Carolina. A confirmed victory in Wisconsin — another swing state — put Trump over the top with 277 electoral college votes as of early Wednesday.

Republicans are also set to take control of the Senate for the first time in four years after key victories in West Virginia and Ohio. Control of the house remained in balance Wednesday afternoon.

The Dow Jones Industrial Average (^DJI) soared more than 1,300 points to a record 43,569 by midday, as investors raced to price in tax cuts, among other policies Trump has floated. Strong gains were also noted on the S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC).

“I don’t know that it’s too much too soon,” Truist chief investment officer Keith Lerner said on Yahoo Finance’s Opening Bid podcast (video above; listen below). “If you think about it coming into this (election), there was a real dispute between (the outcomes). So once you get some clarity and it looks like this is not going to drag out or be a contested election , there is an emergency meeting.”

Trump’s round two has also sparked a slew of important deals.

Tesla shares ( TSLA ) rose 14% to $286 during the session. The company’s ticker page was the most active on Yahoo Finance until noon.

The victory could put Tesla CEO Elon Musk in pole position to shape the future of electric vehicles given his strong support for Trump.

“Tesla has the scale and reach unmatched in the EV industry, and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV environment, coupled with likely higher Chinese tariffs that will continue to push away cheaper Chinese EV players. ( BYD, Nio, etc.) from flooding the US market over the coming years,” Wedbush analyst and Tesla bull Dan Ives wrote in a client note.

Bitcoin (BTC-USD) prices are also moving higher, with Trump promising during his campaign to make the US a digital currency superpower. The move also likely reflects an investor bet on an SEC shakeup that could result in a more digital-asset-friendly chairman.

“With Trump leading the US presidential race and the GOP likely to flip the Senate, we believe the regulatory headwind for crypto has turned into a tailwind and the market is nowhere close to accounting for this shift,” said Bernstein analyst Gautam Chhugani.

Meanwhile, the 10-year Treasury is rising. Professionals believe Trump’s desire to raise tariffs on imports and cut taxes could push up inflation, which could reduce the pace of rate cuts by the Federal Reserve.

“Overall, we think a Trump win means higher inflation in the near term versus the status quo with Harris, but slower growth (potentially shaving up to 0.5 percentage point of GDP in 2025 and 2026),” TD’s head of global strategy Rich Kelley wrote. “For FOMC policy, we think the Fed will continue to ease this year, but likely pause in the first half of 2025 as it waits to get a better sense of the impact of the new administration’s policies on inflation and growth.”

Here’s what Wall Street said at the Opening Bid on a few key topics in the wake of Trump’s historic victory.

“The Fed is important, but it’s probably not as important as it has been. Markets are still pricing in over a 90% chance of a rate cut. I think what’s happening is more about the policies that put together and what does that mean for growth What does that mean for inflation and interest rates a little bit more inflation But overall I would prefer an economy that is strong that supports earnings rather than an economy that needs more rate cuts because it is by being weakened.”

If Elon Musk leads DOGE, it could unsettle Tesla stock: Analyst

“Tesla was one of the shorts that I suggested last week if Harris had won. Obviously, that’s not going to happen. It’s about Musk and what Musk gets. And if Musk gets this role in a Ministry of Government Efficiency , you regulate everything around self-driving, and then it finally becomes something that you can say is really different and valuable about Tesla.

“I suspect this is probably boosterism and it’s not going to be long-term. There are some great things that could happen for Musk in a new government. And one of the things I kind of jokingly commented last week, is Imagine in Trump’s second year that Musk comes in with his undoubted skills and saves ailing Boeing, joins Musk’s SpaceX and creates something new and really exciting.”

“Definitely buy (the “Magnificent 7,” which consists of Apple, Microsoft, parent Google, Amazon, Nvidia, Meta and Tesla), absolutely 100%. I mean, it’s pretty much the one area that has strong earnings growth everywhere .in the world, I just don’t see earning power anywhere else in the world, so in a world where money comes into stocks, technology looks spectacularly better than anything else.

Three times a week, Yahoo Finance Executive Editor Brian Sozzi fields insightful conversations and chats with the biggest names in business and markets on Opening bid. You can find more sections on our video hub or look at yours preferred streaming service.

Brian Sozzi is Yahoo Finance’s managing editor. Follow Sozzi on X @BrianSozzi and further LinkedIn. Tips on deals, mergers, activist situations or something else? Email [email protected].

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