The period between Donald Trump's election victory and his inauguration marked a significant time for financial markets, particularly for assets directly or indirectly tied to his policies, public image, and expected economic strategies. A closer examination of the performance of Trump-related assets during this time reveals remarkable shifts that captured investors' attention.
Cryptocurrency Assets Are the Big Winners
Once a sceptic who said some years ago that bitcoin "seems like a scam", Trump has embraced digital currencies with a convert's zeal. He's launched a new cryptocurrency venture and vowed on the campaign trail to take steps early in his presidency to make the US into the "crypto capital" of the world.
His promises included creating a Strategic Bitcoin Reserve and enacting industry-friendly regulations.
Trump's picks for key cabinet and regulatory positions are stocked with crypto supporters, including his choice to lead the Treasury and Commerce departments and the head of the Securities and Exchange Commission.
Notably, Bitcoin (BTC) itself experienced a robust 47.26% increase after Trump's election win. Crypto-linked stocks Rumble Inc. soared 116.81%, MicroStrategy surged 74.06%, Coinbase Global, Inc. jumped 52.34%, Riot Platforms rose 37.9%, and MARA Holdings rose 22.6%.
Tesla Stock Surges as Musk-Trump Alliance Fuels Gains
Tesla shares have surged roughly 70% since 5 November, fueled by bets of the automaker benefiting from CEO Elon Musk's close ties with U.S. President-elect Donald Trump.
The rally has pushed the market value of the firm back above $1tn for the first time since 2022 and boosted the wealth of boss Elon Musk, who owns a roughly 13% stake in the company.
It marks a bet by investors that a Trump White House might ease up on some of the investigations by safety regulators into features such as self-driving.
The ties between Trump and Musk could also help Tesla navigate shifts in relationship between the US and China, where the company has a significant presence.
Although Trump is generally expected to reduce government support for electric vehicles, such as tax credits, analysts say this could actually benefit Tesla, the market leader in the US, making it harder for rivals to catch up.
Energy and Infrastructure Winners
Energy-focused companies also enjoyed strong gains. Cheniere rose 31.25%, reflecting optimism in the natural gas sector due to expectations of a more favorable regulatory environment under Trump’s administration.
Meanwhile, industrial and infrastructure-related stocks like John Deere saw increases of 13.75%, tied to speculation about increased infrastructure spending under the new administration.
Financial Giants on the Rise
Major financial institutions like Wells Fargo (WFC) and Goldman Sachs (GS) recorded gains of 20.31% and 18.78%, respectively. Investors anticipated deregulation and pro-business policies, which would benefit the banking and financial services sectors.
Similarly, Morgan Stanley (MS) and JPMorgan Chase (JPM) posted solid performances, rising 17.03% and 17.01%, respectively, as expectations of economic growth and higher interest rates underpinned their stock prices.
From cryptocurrency to finance and energy, the performance of Trump-related assets during the transition period underscores the diverse ways in which political developments influence financial markets. These trends not only highlight investor optimism in specific sectors but also offer a glimpse into broader market dynamics shaped by political expectations.