Trump’s promises stimulated the US stocks growth

10.11.2016

At the end of yesterday's trading, the US stock indexes rose amid a very high trading activity, with the value of the Dow Jones Industrial Average updating its historical maximum in the course of trading, according to MarketWatch.

Dow Jones Industrial Average index rose 256.95 points (1.4%), to 18,589.69 points. This is the highest level since August 18. Standard & Poor's 500 rose 23.7 points (1.11%) and amounted to 2163.26 points. The value of Nasdaq Composite rose 57.58 points (1.11%), to 5,251.07 points.

The volume of transactions on the US stock exchanges amounted to about 12 billion shares, which is 80% above the daily average for the past 3 months and the highest level since June sales, after Brexit.

Investors yesterday got inspired by the promise of Donald Trump to increase spending on infrastructure projects.

Meanwhile, the victory of Trump came as a surprise to investors who favored Hillary Clinton, considering her policy more predictable.

"Clinton's victory was laid by many traders in asset prices, - says CEO of Aberdeen Asset Management, Martin Gilbert. We don’t know how the presidency of Trump will look like, and the markets hate uncertainty."

Initially, the US stock market reaction to the victory of Trump was sharply negative - stock index futures have collapsed, the fall reaching 5%.

"Investors will take some time to evaluate the possible effects of Donald Trump presidency and to act in accordance with these estimates”, - says investment an analyst at Russell Investments.

The experts noted that the pharmaceutical sector, which was threatened with a tighten control in case of Hillary Clinton victory, benefits from the present situation.

In addition, the increase in budget spending, as Trump promised, can revive economic growth in the US and support the development of the infrastructure sector.

Pfizer (NYSE: PFE) Inc. rose on Wednesday by 7.1%, while Caterpillar Inc (NYSE: CAT), the manufacturer of road and agricultural vehicles, rose 7.7%.

Among the 11 major industry groups of Standard & Poor's 500, the medical, financial and industrial sectors rose.

The share price of Bank of America Corp (NYSE: BAC) jumped by 5.7%, Wells Fargo & Co (NYSE: WFC) rose 5.4% and J.P. Morgan Chase rose 4.5%.

Meanwhile, Apple's share price (NASDAQ: AAPL) fell 0.2%, Facebook (NASDAQ: FB) fell 0.8%, and Alphabet (NASDAQ: GOOGL) fell 0.7%.

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