Presidential Election Causes Major Market Change

Many companies, one being Goldman Sachs, indicated (before Trump won the presidency) that the S&P 500 would not change by much. But in reality, some sectors have drastically changed.

The day after the votes closed, the S&P 500 reached a record high. Some believe that the stocks surged because many clients/ investors tried to reduce the risk in their portfolios before the election results were available. However, after Trump's win, many have bought back into trades of small caps, energy, and technology stocks. With Trump’s inauguration day being on January 20th, 2025, as of currently many investors are suiting their portfolio according to the policy changes. Some factors indicate that energy companies will stay behind while fossil fuel, financial, and small-cap companies will outperform the broader market.

Coming to the topic of treasury, there has been a significant rise in yields from that area, before the 10-year yields were 3.6% at a low of this year and now it’s at 4.4%. However the fact is the stocks aren’t affected by this because they have the sole economic data to rely on.

Tariff Talks, M&A Talks, IPO Talks:

In the topic of Tariffs, some investors believe that Trump could utilize new tariffs without legislation. Goldman Sachs economists believe that Trump will impose a tariff on items coming from China and some European companies. There is a good chance that mergers and Acquisitions could also increase under Trump's presidency. Economists predict that in 2025 there will be $4 Trillion in Corporate spending, as it will be between cash to shareholders and growth investing. Apart from this, there is a solid chance that the number of IPOs may significantly rise as the economic environment surrounding it seems better than normal.