WASHINGTON (dpa-AFX) - Stocks are poised to surge in early trading on Wednesday, extending the rally seen in the previous session. The major index futures are currently pointing to a sharply higher open for the markets, with the S&P 500 futures jumping by 2.2 percent.
The substantial upward momentum on Wall Street comes as former President Donald Trump has been declared the winner in the presidential election versus Vice President Kamala Harris.
Claiming victory in several key swing states, Trump is projected to win far more than the 270 Electoral College votes needed to secure his return to the White House.
Trump is seen by the markets as better for corporations and is likely to renew the tax cut package enacted during his first term, which was due to expire at the end of 2025.
A Trump administration is also expected to scale back government regulations and be less hostile to mergers and acquisitions.
However, Trump has also called for increased tariffs on China and other countries, which could lead to renewed inflation concerns.
'A side effect of tariffs and higher prices would be interest rates staying higher for longer, which would be unhelpful for the housing market which, in turn, will act as a drag on home-related categories,' said Neil Saunders, Managing Director of GlobalData.
He added, 'While Trump promised lower interest rates, and wants more control over the setting of rates, it is not in his immediate gift to enact this kind of change.'
Republicans are also projected to retake control of the Senate for the first time in four years, although control of the House remains up for grabs.
With the elections now largely in the rearview mirror, traders will turn their attention to the Federal Reserve, which is due to announce its latest monetary policy decision on Thursday.
The Fed is widely expected to lower interest rates by 25 basis points, but the accompanying statement could the impact the outlook for future rate cuts.
Stocks showed a lack of direction over the course of Monday's session before closing moderately lower but showed a strong move back to the upside during trading on Tuesday. The tech-heavy Nasdaq helped lead the way higher.
The major averages ended the day off their highs of the session but still firmly positive. The Nasdaq surged 259.19 points or 1.4 percent to 18,439.17, the S&P 500 shot up 70.07 points or 1.2 percent to 5,782.76 and the Dow jumped 427.28 points or 1.0 percent to 42,221.88.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index spiked by 2.6 percent, while Hong Kong's Hang Seng Index plunged by 2.2 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has risen by 0.3 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.8 percent.
In commodities trading, crude oil futures are plunging $1.92 to $70.07 a barrel after climbing $0.52 to $71.99 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,688.70, down $61 compared to the previous session's close of $2,749.70. On Tuesday, gold inched up $3.50.
On the currency front, the U.S. dollar is trading at 154.15 yen compared to the 151.62 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0710 compared to yesterday's $1.0930.
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