(Bloomberg) — Stocks extended gains, Treasury yields jumped and the dollar climbed the most since March 2020 as early returns bolstered trades that have for months risen with Donald Trump’s election prospects.
With polls closed in more than two-thirds of states, S&P 500 futures were up 1.1%, US 10-year yields surged 18 basis points to a four-month high of 4.46% and Bitcoin spiked 7.4% to a record – moves that together bore the imprint of trades linked to a Republican victory. Trump jumped out to an early Electoral College lead over Democrat Kamala Harris, but pivotal battlegrounds — including the Blue Wall of Michigan, Pennsylvania and Wisconsin — remained tightly knit.
The Bloomberg Dollar Spot Index was up 1.5% amid haven demand and as traders returned to wagers seen as benefiting from low-tax and high-tariff policies under a potential Trump administration. The Mexican peso slumped 2.8%, while the Japanese yen and the euro slid at least 1.6%. The offshore yuan declined 1%. Equities in Japan and Australia climbed, while shares in Hong Kong slipped. A rise in the greenback sank copper alongside most metals. Oil fell.
Contracts on the Russell 2000 Index added 2.4%. Smaller companies with typically domestic operations are seen as potential gainers in a Republican win, given the party’s protectionist stance. Trump Media & Technology Group Corp. surged in trading on Robinhood Markets Inc.’s 24-hour platform.
Notable moves clustered in a handful of assets thought sensitive to Trump’s policy proposals, among them the dollar, which has strengthened amid plans to raise tariffs, and bond yields, which have climbed partly in anticipation of spending plans that may widen the $1.8 trillion US budget deficit. Crypto is seen as benefiting from relaxed regulation and Trump’s public support for the digital currency.
“It’s still very early and I expect we could see some wide swings in both directions,” said Keith Lerner at Truist. “That said, on a short-term basis, several of the betting sites show a steep upswing in former President Trump’s odds of winning as early voting results get tabulated. Consequently, we see some of the perceived Trump trades such as small caps, cryptocurrencies, interest rates and even Trump Media having a boost right now. Still, we have a long night to go.”