On Tuesday, November 8 the country elected a new President, and his name is Donald J. Trump. In perhaps the most surprising rise to the Presidency in United States history, the 70-year-old President-elect defeated Hillary Clinton by way of the Electoral College, despite Clinton having more popular votes at the time of the publication of this article (votes are still being counted). Many news outlets and polls reported that Clinton would win the election by a solid margin, which is why the result was so surprising to many who were reportedly 'in the know.' Effects of the shocking election results were felt worldwide, and the stock market wasn't immune to the effects.
When it became apparent late Tuesday night that Donald Trump was going to become the 45th President of the United States, international markets initially reacted extremely negatively to the news. The value of the Mexican peso against the dollar dropped severely, while the value of the dollar against currencies such as the euro, the pound, and the yen also dropped severely. In addition, Japan's Nikkei, Germany's DAX, and Britain's FTSE all plunged Tuesday night, with S&P futures dropping 5 percent as well. It appeared initially that the impending Trump presidency may have a negative impact on the market for the foreseeable future.
But on Wednesday, the markets had a dramatic turnaround, with the aforementioned dips in value giving way to surges in value that put them in a better place than they were prior to Tuesday night. In addition, the Dow industrial average surged 256.95 points on Wednesday to 18,589.69, and had a new closing high of 18,807.88 on Thursday. The S&P 500 rose 0.2%, moving closer to the record high of 2190.15.
In addition, industries that Donald Trump talked about favorably during his campaign such as the banking (he wants to loosen restrictions on banks) and the pharmaceutical industries (he wants to repeal the Affordable Care Act) also enjoyed surges. For example, Pfizer rose 7.07 percent on Wednesday and the iShares Nasdaq Biotechnology ETF rose 8.93 percent. As far as the banking industry is concerned, JPMorgan Chase rose 4.60 percent, and Wells Fargo rose 5.38 percent.