Investors are now flocking to "Trump trades" after former president Donald Trump secured the U.S. presidential election.

Declared the winner on Wednesday morning after achieving the 270 electoral votes needed to clinch the presidency, Trump’s victory has spurred immediate, dramatic reactions across global markets.

Following the announcement, Wall Street and bitcoin surged to fresh record highs, with the dollar showing a strong rally.

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The gains reflected an optimistic market response to Trump’s return to office, with the dollar especially climbing after early election results hinted at a Republican win in Georgia. This made ripples in the markets, intensifying through Tuesday.

The dollar index—a benchmark measuring the currency against six major global currencies, including the euro and yen—jumped 1.25%, reaching a four-month high.

However, not all sectors benefited; renewable energy stocks dropped, reflecting investor apprehensions about potential shifts in Biden's policy.

Pre-Election Trading Trends

Even before Trump’s win, investors were pouring vast sums into major S&P 500 stocks, leading to unprecedented valuations.

The top 10 companies by market cap—such as Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta Platforms, Berkshire Hathaway, Tesla, and Broadcom—now trade at an average of 49.3 times their per-share earnings from the past year. This is substantially above historical averages.

By Monday’s close, the S&P 500 itself was trading at 26.1 times earnings, underscoring the high expectations investors placed on a Republican victory.

Trump Trades

Trump’s own media company, Trump Media & Technology Group, also saw a rise in stock prices. Following a report of significant quarterly losses, the company’s shares climbed, as much as, 30% before fluctuating amid another volatile trading session.

Cryptocurrency markets reflected similarly bullish sentiment.

Bitcoin briefly reached a record $75,000, a milestone last seen in March, and by 9:30 a.m. Eastern Time, had gained 7%, trading at $74,305.

Crypto-related stocks surged as well, with MicroStrategy up 13%, Coinbase Global rising 16%, and MARA Holdings increasing by 9.7%.

Altcoins followed suit: Ethereum climbed 9.1% to $2,633, Solana spiked 13% to $187, and Dogecoin—a popular meme token promoted by Trump ally Elon Musk—surged 18% to just under 20 cents.

Both candidates have shown support for crypto this election cycle.

Trump’s new policy had a more pronounced effect on the market. Earlier this year, he pledged to establish a Bitcoin strategic reserve and replace SEC Chair Gary Gensler, known for his critical stance on crypto.

Recently Vice President Harris described blockchain as an “industry of the future” and pledged to support digital currencies.

Tesla’s Gains on Anticipated Policy Benefits

Trump’s pro-business policies seem to have revived investor enthusiasm for Tesla.

Trump has hinted that he may consider a government role for Elon Musk, aligning Musk’s aspirations for reduced government spending with Trump’s broader economic goals.

The idea of tech billionaire Musk potentially leading a commission to enhance government efficiency has stirred interest among investors. They see potential gains for Tesla and Musk’s wider business interests under a Trump administration.

Republican Majorities Spur Market Optimism

With significant Republican wins of seats in both the Senate and House, Trump now wields significant power to push through tax cuts and enforce tariffs on imports.

These policies have buoyed the dollar, with traders expecting that fiscal stimulus could further enhance economic growth.

When the New York market opened on Wednesday, the S&P 500 rose by 2.1%, the Dow Jones by 3.1%, and the Nasdaq composite by 2.1%, setting new records across the board.

Crypto Trump Trades

“That’s the Trump trade,” Marta Norton, chief investment strategist at Empower Investments, told CNBC, capturing the general sentiment among investors.

Financial analysts have also projected that Trump’s victory could see crypto values climb further, potentially pushing Bitcoin above $80,000 in the coming months.

“There’s a lot of emotion, there’s a lot of euphoria, based on perspective in markets today,” one expert noted. “But that doesn’t necessarily mean that’s the way markets are going to trade in perpetuity.”

While the markets adjust to Trump’s return, investors appear emboldened by his pro-business stance, positioning for potential gains in various sectors from crypto to big tech.