Markets welcome Trump win with a surge

Wall Street roared to life Wednesday after a tumultuous day of trading in global financial markets amid hopes that president-elect Donald Trump would reinvigorate the American economy by combining big tax cuts with new government investments.

What initially was a panicked global sell-off Tuesday night transformed into a near-record high for Wall Street by the end of trading on Wednesday. The turnaround began as Trump struck a conciliatory tone in his early morning acceptance speech, calling on voters to “bind the wounds of division.”

In addition, the Republican sweep of Congress raised the probability that Trump’s proposals to radically reform the tax code and rebuild the nation’s infrastructure could become a reality.

The blue-chip Dow Jones industrial average surged ahead about 250 points, or 1.4 per cent, close to an all-time high. The Standard & Poor’s 500-stock index and the tech-heavy Nasdaq each gained about 1 per cent.

Colin Cieszynski, chief market strategist at CMC Markets Canada, said the bounce seen in stock markets shows that investors no longer believe in the gloom-and-doom scenarios of a Trump U.S. presidency.

“It’s pretty spectacular actually how the markets have come back over the course of the morning,” he said.

“Everybody is taking his victory speech, which was quite presidential and conciliatory . . . as a good sign.”

The Canadian dollar was down 0.41 of a cent (U.S.) to 74.75 cents, against a strengthening greenback. Crude oil added 29 cents to $45.27 a barrel, after trading lower for most of the day.

“This is the best case scenario for how the markets are reacting,” said Kathryn Del Greco, a vice-president and investment adviser at TD Wealth.