Like the majority of America, investors and traders were very much expecting Hillary Clinton to win. However, a surprise unlike any other crashed down on Wall Street on Wednesday morning. The degree of total shock and and awe could only be surmised as "bigly." Similar to any other national surprise, the market dropped significantly, with all the major indexes down orignally. As the day progressed, something more unexpected than Donald Trump usurping Hillary Clinton for the United States Presidency. The market began to rise. Both The S&P 500 and NASDAQ gained roughly around one percent.
Such a rise in the stock reflects investors' optimism in the layout for Trump's economic agenda. In his victory speech late Wednesday morning, Trump highlighted his plans to reinvest in America's crumbling infrastructure. Furthermore, drug and defense stocks both increased, signaling Trump's plans to repeal and replace Obamacare as well as dramatically boost defense spending. As shown by these stock price fluctuations, Trump's plans to "Make America Great Again" has a profound impact on the market.
Volatility also occurred in more long term markets, specifically that of United States Treasury Bonds. Trump's plan to increase spending is causing fear of rising inflation in the markets. As a result, Treasury Bonds simultaneously saw a rise in yields and a stark decline in price. Sales of Treasury Bonds could very much be in part to Trump's views on Federal interest rates. For years, Federal Reserve Chairwoman Janet Yellen has kept interest rates low, a monetary policy Trump has opposed. With her term ending in 2018 and two spots on the Board of Governors currently vacant, Trump has the power to decidedly reshape the Federal Reserve and with it the United States economy.
Trump's ascent to the Presidency transcended over the border, affecting global economies and market on Wednesday as well. The Peso or unit of Mexican currency fell sharply over the course of Trump's first day of being President-Elect, possibly forecasting troubles Mexico might have with Trump's plan to build a wall and change trade deals such as NAFTA between the two nations. The Asian financial markets performed sourly as well in the wake of the election results with the Nikkei 225, Japan's stock market index, dropping approximately 5 percentage points. While it is clear that Trump's election sent the world's financial markets into disarray, the real uncertainty lies in how the implementation of Trump's policy goals will affect the United States and global economies.
