The Dow Jones index climbed more than 300 points (1.5 percent), by the afternoon, coming back from an abrupt 750-point plunge as election results came in. Stock markets reversed overnight losses stemming from the shock of Donald Trump's upset victory and and the Dow Jones Industrial Average soared to what would be a record closing high as investors assimilated the implications of the Republican return to the White House.
Other global market indicators also showed signs of calm after Tuesday night uneasiness. Gold fell to $1,270 an ounce, down from the previous day's close, after soaring as high as $1,333 overnight as investors fled to safety. U.S 10-year Treasury securities told a similar story, with yields rising to the highest levels since January after briefly collapsing during the night. Meanwhile, the dollar retraced massive movements against major foreign currencies.
Although investors initially reacted to Trump's victory by assuming that the Fed would react to the resulting turmoil by postponing interest rate hikes, an increase in the Fed's target as soon as December was again seen as a likelihood by the afternoon.
Reacting to the gyrations, MUFG Union Bank chief financial economist Chris Rupkey wrote that we think the stock market will settle down and decide that it likes Trump.
One of the few market sectors to perform poorly was gun manufacturing, an industry that often benefits from demand generated by fears that a Democratic president will enact legislation curbing access to guns.
Otherwise, however, markets appeared at peace with a coming Trump presidency, because he is not perceived necessarily as bad for the market necessarily. A prominent Trump endorser even admitted he left Trump's New York victory party Tuesday night to buy stocks during the brief panic, sensing an opportunity to buy cheap.