US Markets Pricing In Result – Russell 2000 Leading

As the US election unfolds, it’s becoming clear that Donald Trump is outperforming his 2020 results, especially in key Republican strongholds.

Trump is leading in the electoral college with 266 votes, with 270 required for a win. Having secured North Carolina, a critical swing state, and he’s looking strong in other swing state races too. In Georgia, officials have even stated that Trump’s lead is likely unbeatable based on the remaining votes, so it’s expected that Georgia will also go red today. In Nebraska, Trump is predicted to win 3 out of the 5 electoral votes.

There are hints that Trump could edge out wins in Pennsylvania, Michigan, Wisconsin, and Arizona as well, though by narrow margins. For Harris, the path to a comeback is tightening. If Trump clinches Georgia, Harris would need to hold onto all traditionally Democratic “Blue Wall” states to have any shot at victory.

The momentum is also favoring Republicans in Congress. They’re on track for a big win, with a solid chance of taking the Senate as they’ve already flipped four Democratic seats.

With the odds leaning toward a Trump win, financial markets are already responding. The dollar is gaining strength after earlier losses, and GBP/USD and EUR/USD are both down, showing the dollar’s resurgence. Stock index futures are rising as investors see a clear path for Trump and some clarity in markets. The Russell 2000 futures (RTYW00) are indicating the largest rise of the morning, up more than 5%, with the DJIA, S&P500, and NASDAQ all looking likely to start the day more than 1% in the green.

Stocks directly associated with Trump supporters, including Tesla (TSLA), are seeing an upward move of more than 10% in early pricing.

U.S. Treasury yields are particularly sensitive to the election outcome. The 10-year yield is up 11 basis points, while the 2-year yield is up by 7, indicating that bond investors are prioritizing the election’s economic impact over the Federal Reserve’s anticipated interest rate cuts.

A Trump win, paired with a Republican sweep in Congress, could significantly increase the U.S. deficit.

Although official results are still pending in many states, it’s clear the financial markets are gearing up for a Trump victory, with the man himself having declared victory in a speech to supporters. An official result is likely before long, and the certainty that markets will not have to bear with significant uncertainty is being well received.