NEW YORK: Wall Street stocks surged on Wednesday (Nov 9) following Donald Trump’s shock win of the US presidency, with pharmaceutical and banking shares especially strong in anticipation of favorable policies.
US stocks began tentatively, but gradually pushed higher, with gains accelerating after Democrat Hillary Clinton emphasised the need for an orderly transfer of power during her concession speech.
The Dow Jones Industrial Average jumped 256.88 points (1.40 per cent) to 18,589.69. The broad-based S&P 500 rose 23.70 points (1.11 per cent) to 2,163.26, while the tech-rich Nasdaq Composite Index advanced 57.58 points (1.11 per cent) to 5,251.07.
“The market feels the uncertainty is now over, even though many people are not happy with who won,” said Sam Stovall, chief investment strategist at CFRA. “That ends up represent ating a good buying opportunity.”
Shares in sectors, like drug manufacturers, threatened by more regulation from a Democratic administration soared. Pfizer jumped 6.7 per cent, Merck 6.1 per cent, and Novartis 4.3 per cent.
Bank shares also jumped for the same reason, with JPMorgan Chase surging 4.6 per cent, Goldman Sachs 5.8 per cent, and Wells Fargo 5.4 per cent.
Also at the top of blue chip gainers was heavy equipment manufacturer Caterpillar, which rocketed 7.7 per cent, likely on hopes it would benefit from a Trump administration’s plans to sharply increase spending on US infrastructure development.
Several analysts warned that markets could see volatility ahead as Trump’s administration begin to takes form and eventually take office.
“The Trump foreign policy will be a major source of market anxiety and geopolitical instability,” Eurasia Group said in a note that listed several worries, including shifts in the US stance towards Russia and a potential withdrawal from the Iran nuclear agreement.