U.S. index futures surged in pre-market trading on Wednesday, driven by expectations of a Donald Trump victory and Republican control of Congress, which could benefit companies through his tax cut and tariff agenda. Trump reportedly secured 270 electoral votes, though other networks have yet to call the race. Sectors like banking and healthcare led gains, while clean energy stocks fell amid expectations of less regulatory support.
Investors bought dollars, bitcoins, and stocks while selling bonds in response to Trump’s potential win and Republican control of Congress. This scenario pushed stock futures to record highs, strengthened the dollar, and boosted bitcoin above $75,000.
At 5:11 AM, Dow Jones futures (DOWI:DJI) jumped 1,177 points or 2.77%, S&P 500 futures rose 2.22%, and Nasdaq-100 futures increased 1.71%. The 10-year Treasury yield stood at 4.428%.
A Trump win is expected to support tax cuts, deregulation, and strengthening sectors like finance and tech, while also increasing global volatility and Treasury yields. His victory would broadly impact U.S. trade, tax, and climate policies, as well as immigration, energy, and international conflicts.
Trump’s proposals include higher import tariffs, corporate tax cuts, and increased fossil fuel production. He also advocates for mass deportations, stricter borders, citizenship law changes, and reevaluating U.S. support for Ukraine and NATO’s role.
In commodities, oil, metals, and grains fell due to the stronger dollar as investors reacted to Trump’s potential victory. Soybeans (CCOM:SOYBEAN) dropped 1.74%, and copper (CCOM:COPPER) -2.24%.
Gold (PM:XAUUSD) fell 0.75% to $2,725.635, as the dollar’s strength made it pricier and higher Treasury yields pressured the metal. Despite this, gold remains appealing as a safe haven amid trade tensions and economic uncertainty, especially given Trump’s proposed tariffs.
Oil prices declined after two days of gains. Besides the dollar’s appreciation, U.S. crude inventory increases exceeded expectations. If elected, Trump may enforce protectionist policies affecting demand from China, the world’s largest importer. The strong dollar makes oil more expensive for other nations, reducing demand.
West Texas Intermediate crude for December fell 1.28% to $71.07 per barrel, while Brent for January declined 1.26% to $74.58.
In crypto markets, Bitcoin (COIN:BTCUSD) is up 6.2% over the past 24 hours at $73,578 after reaching a record high of $75,410.10 overnight, fueled by the prospect of a Trump victory in the U.S., suggesting a more lenient approach to cryptocurrency regulation. Investors speculate a Republican administration would encourage innovation in the crypto sector. Ether (COIN:ETHUSD) is up 8.1% at $2,618.
Today’s U.S. economic agenda includes the final October U.S. services PMI at 09:45 AM, measured by S&P, previously at 55.3.
Asia-Pacific markets closed mixed on Wednesday. Japan’s Nikkei 225 rose 2.61%, and the Topix gained 1.94% on optimism around the Bank of Japan’s policies. Meanwhile, South Korea’s Kospi dropped 0.52%, and Kosdaq fell 1.13%. Hong Kong’s Hang Seng lost 2.5% in the final trading hour, while China’s CSI 300 closed down 0.5%. Australia’s S&P/ASX 200 rose 0.83%.
China’s National People’s Congress is holding a five-day meeting to discuss economic stabilization measures, drawing investor attention for potential stimulus announcements and policy updates. Additionally, the People’s Bank of China’s governor reiterated the central bank’s commitment to supportive monetary policy to boost economic growth, as reported by state media.
In Japan, manufacturing confidence declined in November, impacted by China’s weakened economy and high inflation, according to a Reuters survey. The services sector confidence dropped for the fifth consecutive month, pressured by high costs and labor shortages. Companies also cited currency market volatility as a concern. The manufacturing sector confidence index fell to 5, while services hit 19, the lowest since February 2023.
European markets are trading higher, led by gains in healthcare stocks, with Siemens Healthineers (TG:SHL) and Novo Nordisk (TG:NOV) among top performers, while utilities lagged.
Novo Nordisk met quarterly profit expectations, while Siemens Healthineers saw a 4.7% revenue increase for the fiscal year.
Other corporate highlights include BMW (TG:BMW) reporting a 61% drop in quarterly profit due to weak sales in China and brake issues. Revenue fell 15.7% to 32.4 billion euros, missing analyst expectations. BMW expects a Q4 recovery with higher deliveries and a more profitable product mix, aiming for an operating margin between 6% and 7% for the year.
Puma (TG:PUM) posted a 5% increase in currency-adjusted sales, reaching $2.48 billion, driven by demand for running and soccer footwear. Its annual revenue and profit forecast were maintained.
Marks & Spencer (LSE:MKS) reported half-year profit of $524.6 million, beating expectations and up 17.2%, driven by market share gains. Revenue rose 5.7% with growth in food and clothing sales, marking successful recovery efforts led by CEO Stuart Machin.
Barry Callebaut saw annual revenue rise by 22.6% to 10.4 billion Swiss francs, passing cocoa costs onto customers. However, sales volume remained flat due to high ingredient costs and challenges in the gourmet division.
UniCredit (BIT:UCG) raised its 2024 profit forecast above 9 billion euros and announced a 50% dividend payout from 2025 profits. Q3 net profit was 2.51 billion euros, surpassing estimates, with a 3% annual revenue increase driven by net interest income.
Credit Agricole (BIT:1ACA) reported a 4.7% drop in Q3 net profit to 1.67 billion euros ($1.83 billion), above the forecast of 1.58 billion. Strong investment banking performance offset retail weaknesses. Revenue grew 2.3%, with risk provisions below expectations. The joint venture with Worldline remains on track for March 2025.
Persimmon (LSE:PSN) reported growth in private home sales in Q3 and projects annual growth, driven by autumn demand. Improved affordability with more high loan-to-value mortgages benefited buyers, especially first-time purchasers.
Microlise (LSE:SAAS) expects its services to normalize by the end of next week following a recent cyberattack. The company states the financial impact will be minimal, though employee data was affected, with no customer data compromised.
Wizz Air (LSE:WIZZ) lost its appeal in the General Court of Luxembourg against a 2 million euro aid granted to TAROM by Romania, approved by the European Commission. The court ruled the aid proportional and compliant with state aid rules.
Eurozone business activity stabilized in October, with the services sector offsetting industrial decline. The Purchasing Managers’ Index rose to 50.0 from 49.6 in September, indicating economic stability. The services sector saw slight growth, essential to avoid a recession. Demand for services dipped slightly, but lower inflation and higher wages are expected to spur consumer spending.
On Tuesday, U.S. stocks closed higher, led by a tech-driven Nasdaq rally, up 1.4%, followed by the S&P 500 rising 1.2%, and the Dow Jones 1.0%. Optimism was fueled by the tight Kamala Harris-Donald Trump election race and a surprising acceleration in the services sector, with October’s PMI rising to 56.0 from 54.9 in September. The trade deficit increase also drew attention, reflecting import growth.
Upcoming earnings reports include Celsius (NASDAQ:CELH), CVS Health (NYSE:CVS), Howmet Aerospace (NYSE:HWM), Aurora Cannabis (NASDAQ:ACB), Teva (NYSE:TEVA), Toyota (NYSE:TM), Six Flags (NYSE:FUN), Johnson Controls (NYSE:JCI) and MarketAxess (NASDAQ:MKTX) before the open.
After the close, results are expected from Arm Holdings (NASDAQ:ARM), Qualcomm (NASDAQ:QCOM), AMC Entertainment (NYSE:AMC), e.l.f. Beauty (NYSE:ELF), Clover Health (NASDAQ:CLOV), AppLovin (NASDAQ:APP), MercadoLibre (NASDAQ:MELI), Coeur Mining (NYSE:CDE), Hecla Mining (NYSE:HL) and Albemarle (NYSE:ALB), among others.