Stock market today: Stocks, bond yields and bitcoin rise as US elections deliver Republican gains

HONG KONG (AP) — Stock prices and bond yields soared Wednesday as the Republican Party won control of the Senate and former President Donald Trump secured the 270 electoral votes needed to return him to the White House.

The full results of Tuesday’s elections It may not be known for days as officials count all the votes, but investors were already repositioning in anticipation of big gains for Republicans, who took control of the Senate for the first time in four years. The results of the House of Representatives elections were not yet final.

Trump won the battleground state of Georgia, a Republican stronghold that had voted for Democrats in 2020. A victory in North Carolina helped Trump narrow Vice President Kamala Harris’ path to victory. Reaching Pennsylvania brought him within 3 electoral votes of the 270 votes needed to become the next president.

While gains were forecast for US markets on Wednesday, futures for the S&P 500 rose 1.9% and the Dow Jones Industrial Average rose 2.2%. The composite future on the Nasdaq was 1.7% higher.

Bitcoin’s price rose nearly 8% to a record $75,345.00 as investors bet on a victory for Trump, who has pledged support for cryptocurrencies. It later fell to $74,355.00.

Bond yields also rose sharply, with the yield on ten-year government bonds rising to 4.4% from 4.28% on Tuesday.

“Markets are struggling to figure out what will happen next, but for now the market is pricing in higher growth and higher inflation prospects,” Peter Esho of Esho Capital said in a commentary.

In early European trading, Germany’s DAX rose 0.6% to 19,377.79, while Paris’ CAC 40 rose 0.7% to 7,460.26. Britain’s FTSE 100 rose 0.7% to 8,233.12.

Markets around the world are fixated on what the election will mean for US economic, monetary and trade policies, as well as geopolitics. A division in Congress between political parties would complicate policymaking, and a Trump-led White House could have far-reaching consequences given his support for steep tariff increases, especially on imports from China.

The broad U.S. stock market has historically tended to rise regardless of which side wins the White House, even as each party’s policies can help or hurt the profits of different industries.

Since 1945, the S&P 500 has risen in 73% of the years in which a Democrat has been president and in 70% of the years in which a Republican has been president, according to Sam Stovall, chief investment strategist at CFRA.

The S&P 500 is up nearly 70% since the 2020 election brought President Joe Biden to power. The economy rebounded to records as the U.S. economy recovered from the COVID-19 pandemic and avoided a recession despite a rise in inflation.

In Asian stock trading Wednesday, Japan’s Nikkei 225 index gained 2.6% to 39,480.67, while Seoul’s Kospi lost 0.9% to 2,553.90.

Australia’s S&P/ASX 200 rose 0.8% to 8,199.50.

Hong Kong’s Hang Seng index fell 2.3% to 20,525.06, ending a three-day rally as investors looked for safe havens amid uncertainties surrounding the US election. The Hang Seng Tech Index fell 2.5%, while the Shanghai Composite Index fell 0.1% to 3,383.81.

Trump has pledged to sharply raise tariffs on imports from China and other countries, making the outlook for Chinese exporters bleaker at a time when Beijing has relied heavily on ramping up production in a bid to revive its slowing economy .

“Positive results for Harris are expected to boost Asian assets, while Trump’s gains could exert downward pressure,” ActivTrades’ Anderson Alves said in a commentary.

China’s markets were among the most active in the region this week as leaders held a meeting of the Standing Committee of the National People’s Congress, the country’s legislature.

The meeting is expected to bring more steps to stimulate faster economic growth and resolve rising local government debt. On Tuesday, optimistic comments from Premier Li Qiang on the potential for both fiscal and monetary policy helped stock benchmarks in Hong Kong and Shanghai rise by more than 2%. Li also expressed confidence that China will achieve its growth target of around 5% this year.

US stocks rose on Tuesday as voters went to the polls and new data showed the economy remains healthy. The S&P 500 rose 1.2% and the Dow Jones Industrials rose 1%. The Nasdaq composite gained 1.4%.

Later this week the Federal Reserve must decide on interest rates. There is widespread expectation that the US central bank will cut its key interest rate for a second time, probably again in December.

In other trades early Wednesday, U.S. benchmark crude lost 90 cents to $71.09 a barrel. Brent crude, the international standard, lost $1.00 cent to $74.53 a barrel.

A Trump victory was expected to strengthen the value of the dollar, which rose to 154.02 Japanese yen from 151.62 yen late Tuesday.

The euro fell from $1.0931 to $1.0741.