US stocks hit records, pound slides on UK vote

US stocks reached intraday records and the dollar rose, but the British pound tumbled as the UK’s ruling Conservative Party lost its parliamentary majority, plunging the country into uncertainty just days before Brexit negotiations were due to start. Crude rose following two days of losses, and gold fell.

Sterling dropped the most in eight months as the election intended to strengthen Prime Minister Theresa May’s hand in negotiations with the European Union instead left her battling to survive. The currency’s retreat gave British stocks a boost, as the FTSE 100 Index gained along with most major global equity gauges. UK bonds rose.

Outside of Britain, investors took the election results in stride, as the S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite Index all hit record highs. The UK vote capped a series of major events this week — including former FBI Director James Comey’s testimony before the Senate Intelligence Committee on Thursday — most of which passed with relatively little fuss. Attention will now turn to the week ahead, when the Fed is expected to raise interest rates and the Bank of England, the Bank of Japan and the Swiss National Bank also meet.

“For now, the results of the UK elections do not appear to be threatening the global growth story,” Mark Haefele, global chief investment officer at UBS Group AG, said in a note to clients. But for Britain,” political uncertainty is likely to more than offset any benefit from a marginally weaker pound,” he said.