Financial markets news: Tesla, crypto, the dollar are Trump trade winners

Financial markets responded to Donald Trump’s victory in the U.S. presidential election with a sharp rally, despite significant uncertainty surrounding his plans for tariffs, tax cuts, and mass deportations, and how these could impact the world’s largest economy.

One week later, the surge appears to be stabilizing. On Tuesday, the three major U.S. stock indexes ended the day in the red after gaining around 5% since November 4, the day before the election.

Here’s a look at some of the companies that have benefited the most, as investors try to anticipate the economic landscape for the next four years.

Tesla

Tesla shares have surged around 35% since November 4, lifting the company’s market value back above $1 trillion for the first time since 2022. This rally has also added more than $50 billion to the wealth of CEO Elon Musk, who holds roughly a 13% stake in the company.

The gains reflect investor optimism that a Trump administration might reduce scrutiny from safety regulators, particularly concerning features like self-driving technology. Furthermore, Musk’s ties to Trump could help Tesla navigate any shifts in U.S.-China relations, as the company has a significant presence in the Chinese market.

While Trump is generally expected to scale back government incentives for electric vehicles, such as tax credits, analysts believe this could actually work in Tesla's favor. As the market leader in the U.S., Tesla would have less competition from rivals, making it harder for them to close the gap.

Crypto

The price of Bitcoin, the world’s most well-known cryptocurrency, surged over 25% to set new all-time highs this week following Trump’s election win, briefly breaking through the $89,000 mark.

The rally reflects growing investor expectations of significant changes for the sector, which had faced a tough regulatory environment under the Biden administration, with warnings about fraud and scams.

Although Trump previously referred to crypto as a scam, he shifted his stance during his campaign, promising to make the U.S. the “crypto capital of the planet.” He also pledged to create a strategic Bitcoin stockpile and remove Securities and Exchange Commission (SEC) Chairman Gary Gensler, whose actions against crypto firms had drawn backlash from the industry.

Crypto advocates argue that the sector needs new, tailored regulations, a shift that could depend on the composition of Congress, where they may find more sympathetic allies in the coming year.

The dollar

The dollar index is currently at its highest level since April, having risen more than 2% over the past week.

While this is a positive development for American tourists traveling abroad, it sends a more mixed signal about the broader economy.

The dollar’s strength is closely tied to interest rates, and investors are now betting that rates could remain higher for longer than previously expected. This increase in the dollar partly reflects pre-election data suggesting that the U.S. economy may be stronger than initially thought.

However, investors also worry that Trump’s policies—such as lower taxes, reduced immigration, and new trade barriers—could exert ongoing inflationary pressure, prompting the U.S. central bank to hesitate in cutting rates.

Last week, the Federal Reserve provided little clarity on its future actions, stating it was too early to determine the full impact of Trump’s policies on the economy.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.