Stocks reach new highs as investors pick winners — and losers — in a Trump economy

Trading across financial markets underscored investors’ expectations that a second Trump presidency would fuel economic growth by cutting taxes, easing business regulations, bringing manufacturing back to the United States, and spurring domestic oil and gas energy production.

Wall Street also signaled worries that Trump’s promise to impose steeper tariffs on imported goods, coupled with a widening government budget deficit caused by tax cuts, would reignite inflation.

Accelerating consumer prices could force the Federal Reserve to move more cautiously with plans to reduce interest rates. Fewer and slower rate reductions would curb housing construction and prop up mortgage rates.

The Standard & Poor’s 500 index of large companies gained 2.7 percent. The rally was led by banks and other financial companies, which were likely to face stricter government oversight if Kamala Harris had won, and industrial companies that do well when the economy is expanding. Shares of insurers with private Medicare plans rose in anticipation that the new administration would boost payment rates.

The Russell 2000 index of smaller stocks jumped 4.7 percent on the theory that smaller companies will benefit from Trump’s protectionist trade policies.

The dollar rose against China’s yuan and Mexico’s peso, two countries that could be particularly hard hit by tariff increases.

The yield on the benchmark 10-year Treasury note, which influences mortgage rates, rose to 4.45 percent, the highest since early July.

Bitcoin, which Trump endorsed after initial skepticism, rose to a all-time high of $73,832, and is up more than 75 percent this year.

Among individual stocks, Elon Musk, who spent more than $130 million backing Trump, saw shares of Tesla jump 13 percent. Steelmaker Nucor, which would benefit from higher tariffs on foreign imports, rose 14 percent. And Trump Media & Technology Group, which owns Trump’s Truth Social platform, added 11 percent.

“The markets are scrambling to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook,” Peter Esho of Esho Capital said.

As expected, shares of clean energy and solar companies took a hit. Trump has vowed to ramp up fossil fuel production and has frowned on government subsidies for green technologies.

So did real estate stocks. The S&P homebuilders index shed more than 5 percent. Home sales have been hurt as mortgage rates climbed back over 7 percent after dipping to 6.1 percent a few months ago.

Utility stocks, which struggle when interest rates are rising, also fell.

Material from Globe wire services was used in this report.

Larry Edelman can be reached at larry.edelman@globe.com.