Financial expert links market rise to quick election results and Trump's promise of victory

When Donald Trump won the 2024 election, there was a significant upturn in the American stock market.

The Dow Jones Industrial Average rose 1,438 points, or 3.4%, at one point, while the Nasdaq Composite gained 2.8%.

It's not unusual for markets to move positively after an election, but this was an unusual spike. Stephanie Yates, a professor of finance at UAB, says it comes down to two factors.

“Firstly, markets don’t like uncertainty. “When we had an answer to the election question pretty quickly and pretty decisively, that was a very good thing for the markets,” Yates said.

This typically results in a post-election surge, regardless of the winner. However, things will become more specific if Donald Trump wins.

Yates continued: “The second part of this was based on the candidate who prevailed in the election, so market participants started thinking about what that candidate promised, what we might see in the future and what impact that will have on businesses “What impact will this have on markets.”

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When it comes to banks and industries that posted gains on Wednesday, Yates said it mostly had to do with promises of easing regulations, and it's hard to say whether the market will continue that trend until President Trump takes office and these promises will be fulfilled.

Birmingham residents on both sides of the political spectrum say they don't have much understanding of the sudden changes in the stock market.

Jacob Speights said: “It was probably a little more than I expected. I'm sure everything will calm down or, interestingly, it will in the next few months.

Missie Smith said: “It's too early to tell because someone can say they're going to do so much before they take office but then when they get into office it changes so it gets everyone's hopes up , like, 'Oh, I'm going to do all of this.' In contrast, when they get there, they don't do any of it.”

It's also important to note that not every stock is up. After the election, there were winners and losers on the stock market, even if the general trend is positive.