S&P 500, Dow open at record high as Donald Trump wins; Tesla shares jump 13%

US markets opened at record highs on Wednesday as Donald Trump secured the 2024 presidential election, returning to the White House four years after his previous term.

The S&P 500 and Dow Jones surged, with the Dow gaining 628.5 points, or 1.49%, to reach 42,850.4 at the open, while the S&P 500 rose 82.1 points, or 1.42%, to 5,864.89. The Nasdaq Composite also climbed, adding 333.6 points, or 1.81%, to start at 18,772.76.

Tesla shares saw a sharp jump, climbing over 13% to $284.70, as investor sentiment rallied around CEO Elon Musk’s outspoken support for Trump’s campaign.

Musk, who has aligned with Trump’s pro-business policies, is anticipated to have greater influence under Trump’s administration, with Trump suggesting Musk for a potential role in a government efficiency commission. This alignment strengthened investor confidence in Tesla’s future regulatory and tax prospects.

Trump Media & Technology Group Corp also gained momentum, rising over 13% to $38.41, amid a broader surge in small-cap, domestic-focused stocks on expectations of favourable Trump policies.

Ahead of the market open, S&P 500 and Dow futures hit new highs, with the Dow up more than 1,200 points as investors anticipated potential tax relief, deregulation, and pro-domestic economic measures. The Russell 2000 Index futures also rose 5.6%, driven by optimism around policies supporting U.S. manufacturing. Financial stocks surged as well, with JPMorgan, Bank of America, and Wells Fargo rising 5-6% amid expectations of reduced regulation.

Cryptocurrency-linked stocks benefited from Trump’s favourable stance on crypto, with shares of Coinbase, MicroStrategy, and Riot Platforms jumping 11-14%, while bitcoin reached a new peak.

On the other hand, renewable energy stocks, including NextEra Energy and First Solar, saw declines of 7.5% and 11%, respectively, as Trump’s policy approach includes rolling back environmental regulations from the previous administration.

Analysts observed a strong market response, reflecting confidence in Trump’s anticipated economic policies. “A Trump presidency would give markets the clarity they crave, with policies that may drive growth through deregulation and potential tax relief,” said Hendrik Du Toit, CEO of Ninety One.