By Small-cap stocks have taken off after Donald Trump secured a second term in the White House.
The Russell 2000 surged as much as 5% on Wednesday. The index tracks small-cap companies, which are seen as major beneficiaries of a Trump presidency. The index is now up roughly 17% year-to-date.
The Trump administration’s protectionist plan is at least partially designed to protect domestic business. Throughout his campaign, Trump has promised double-digit tariffs on virtually all US exports, citing that China could face as much as a 60% tax rate.
In a note ahead of the election, JPMorgan also noted that small-caps could benefit under Trump due to deregulation and possible tax cuts targeting domestic-oriented businesses.
Small-caps were not the only sector to jump after Trump’s victory.
Financial stocks also gained on the prospect of easier regulation and tax cuts. Meanwhile, Trump’s supportive stance on cryptocurrency sent bitcoin soaring to fresh record high.
Amid market losers, however, were clean-energy stocks, with stocks such as Plug Power and SunRun falling over 10% in pre-market trading. Concern has mounted that the president-elect could try to repeal the Inflation Reduction Act that provides tax credits to renewable-energy firms.
