- JPMorgan and Goldman Sachs gained as much as 7.5% in Wednesday’s premarket.
- Donald Trump won a second non-consecutive term as US president.
- Trump won about 51% of the popular vote and reached enough electoral votes to win, although counting continues.
- UBS and Barclays hope higher tariffs and deficits will force the Fed to keep interest rates higher, benefiting banks.
JPMorgan (JPM) and Goldman Sachs (GS) saw their shares rise in the premarket on Wednesday after Donald J. Trump convincingly won the election for a second consecutive term in office on Tuesday.
The two largest banks in the United States, both members of the Dow Jones Industrial Average (DJIA)soared more than 6% in Wednesday’s premarket. For its part, Dow Jones futures rose more than 3%, leading NASDAQ and S&P 500 futures.
JPMorgan and Goldman Sachs Stock News
Donald Trump won at least 277 electoral votes with around 51% of the popular vote so far on November 5 to become the 47th president of the United States. There are still many votes to be counted, but his presidency is secure. Additionally, Republicans took back the US Senate and appear to have performed well in the House of Representatives.
JPMorgan and Goldman Sachs are the most obvious winners from Trump’s historic victory. This marks the first time since Grover Cleveland’s presidency in the late 19th century that an occupant of the White House has served non-consecutive terms.
UBS published a note to clients saying the higher interest rates expected under a Trump administration would be good for finances. The market expects higher interest rates in a Trump presidency due to higher expected deficits compared to a Democratic Party administration. The federal debt increased by 50% during Trump’s first presidency (2017-2021), and most observers expect it to continue in his second term.
Higher deficits should cause higher inflation, which will cause the Fed to keep interest rates high. Additionally, Trump ran on a policy of broad tariffs. Tariffs, which are taxes on imports, tend to increase inflation, particularly in countries like the US that have large trade deficits and depend extensively on international goods markets.
“We do not expect the Fed to prejudge Trump’s policy agenda. But we believe it will pause the cutting cycle if large tariff increases are announced, assuming the economy is still on solid footing,” Barclays said in a separate note.
UBS said mergers and acquisitions, a major source of revenue for investment banks, will increase precipitously without additional scrutiny from a Democratic-led Federal Trade Commission.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
