Spreadex Market Update
Trump Election Momentum Spurs Bitcoin Record High, Stocks & Dollar Surge
Bitcoin reached over $75,000 for the first time while the dollar rallied and Treasury yields spiked as early US election results leaned in favour of Donald Trump, with betting markets giving him a 91% win probability. Anticipation of Trump's policies, including potential tariffs and tax cuts, led S&P 500 futures up by as much as 2%. European stocks were less optimistic, with fears of trade wars and NATO instability looming under a potential Trump administration.
Equities
The FTSE 100 edged down by 0.1%, closing at 8,172.39 points, while the FTSE 250 slipped by 0.45% to 20,370.04 points.
AstraZeneca weighed heavily on the index, dropping 8.4%, its most significant one-day loss since March 2020, following news that several senior executives at its China unit might be linked to a large insurance fraud investigation in the Chinese pharma sector.
Schroders slid about 14%, bottoming out on the FTSE 100 as it reported greater-than-expected third-quarter outflows. Meanwhile, Associated British Foods climbed 3.2% as it outlined a positive medium-term growth outlook, supported by a 32% increase in annual profits. TP ICAP added 7% after reporting a 10% rise in third-quarter revenue.
Across the Atlantic, US markets closed sharply higher as the S&P 500 gained 1.23%, finishing at 5,783.11 points, and the Nasdaq rose by 1.43% to 18,439.17 points. The Dow Jones also moved up by 1.04% to reach 42,227.74. US futures are pointing to another strong open on Wednesday as election results come in.
US stock momentum was supported by positive economic indicators, including the Institute for Supply Management’s services PMI, which rose to 56.0, marking the sector’s highest growth since August 2022.
Palantir stood out, jumping to a record high after it raised its revenue forecast for the third time this year. Trump Media & Technology Group saw large swings throughout the day, reflecting the election day volatility tied to Trump's presence in the race.
Forex & Commodities
The US dollar surged on Wednesday, marking its biggest one-day gain since March 2020, as projections suggested a Trump victory in the US presidential election.
The dollar index rose 1.63% to 105.04, touching a four-month peak of 105.19, driven by increased demand against major currencies. The Mexican peso dropped sharply, falling 3.36% to 20.7720, while the offshore yuan declined by 1.23% to 7.1860, as markets braced for potential trade tensions under Trump’s tariffs policy. The euro also fell by 1.92% to $1.0719, while sterling lost 1.35% to $1.2865. Against the yen, the dollar rose 1.8% to 154.34.
Bitcoin surged over 8% to reach a record high of $75,120 (at the time of writing), boosted by expectations of crypto-friendly policies from a Trump administration. Trump has promised a ‘US Bitcoin Reserve’ among other pro-Bitcoin policies, a departure from recent government policy towards the crypto industry.
Spot gold prices remained flat, holding at $2,740.28 per ounce as investors awaited election results, although analysts anticipate long-term gains for gold amid Trump’s deficit-fuelled fiscal policies.
US crude oil fell 1.5% to $70.88 per barrel, while Brent crude dropped to $74.36, impacted by a stronger dollar and a build-up in US crude inventories, which rose by 3.13 million barrels last week. Further weighing on oil, a potential Trump victory could see sanctions reimposed on Iran, tightening short-term supply, though longer-term demand remains uncertain due to trade protectionism.
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