After the remarkable victory of Donald Trump in the US presidential election in a stunning comeback four years after being voted out of the White House, the stock market rallied to new heights. This US presidential election has been highly anticipated, not just for US investors but for investors worldwide. It is quite rare that an election and its result will affect the market to such an extent. It has left marketers without clear direction over the better part of last month. At last, it came down a handful of swing states and now the results are in.
In the election, Donald Trump defeated Vice President Kamala Harris. Further, the Republicans will succeed Joe Biden as the 47th president. Coming to the effect of the election, the Dow industrials, S&P 500, and Nasdaq Compostive each ended at record levels with investors expecting lower taxes, deregulation, and a U.S. president who is not shy in on everything from the stock market to the dollar, although fresh tariffs could bring challenges in higher deficit and inflation form.
The promise of corporate tax cuts and deregulation tends to encourage financial innovation, assuring the market is active. These can be defined as “Trump trades,” the effects on the stock market after Trump has become president. These trends are emerging as investors modify their strategies based on the regulatory changes, economic policies, and geopolitical impact related to the Trump presidency.
In 2017, when Trump became president, the cost of consumer goods increased by 5% in the last four years. IN cntract5, since 2021, those prices are increasing by 20%. It is a different economic backdrop in which inflation has become a phenomenon since the COVID in 2020.
The challenges in the supply chain, changing patterns in consumer spending, and interest rates could make many of the ideas the current president talks about either riskier or costlier than before, mainly because unemployment is quite low. When more people are in jobs, it can boost consumer demand and lead to higher prices amid competition for goods and services. But in reality, the markets are in euphoria territory right now. Here, investors and speculators are simply mirroring Trump’s promise of notable growth and protectionism.
There is no doubt that Trump is market and economy-friendly, and it has shown short-term suggestions in stock values. However, stocks will stay high when Trump goes through with a light-touch approach to revolution to scale back some of the reforms managed by President Biden’s administration.
The controversial character of Trump may seem a red flag for the stock market and investors. Still, marketers often take a pragmatic approach, focused on results rather than personal traits. For instance, the trade war with China might spark a strategy to secure better terms for US businesses. So even if markets fall, the investors will get profit opportunities.
Bottom Line
The effect of the stock market from the presidency of Trump will be positive for equities and boost corporate growth. To those who are fixed-income investors, these policies come with higher fiscal deficits and higher growth, going for a short duration and a preference for the US high yield over the emerging market debt in the credit landscape. Gold is also expected to do well.
Finally, Donald Trump has just four years as president, and he quickly wants to move with his economic agenda. The changes are that some of his economic proposals will have a sugar rush effect, the stock market will surge before their impacts go and the higher interest rates slow the economy.
