- By David FrancisDavid Francis is a staff writer for Foreign Policy, where he oversees FP's breaking news blog, The Cable. An award-winning journalist, David has reported from all over Europe, Nigeria, Kenya, Mexico, and Afghanistan on terrorism, national security, the geopolitics of energy, global economics, and the European financial crisis. His work has been published in outlets including the Christian Science Monitor, the Financial Times Deutschland, Slate, and SportsIllustrated.com.
Donald Trump is president-elect of the United States. Global markets aren’t quite sure what to make of it.
Dow Jones Industrial Average futures fell as much as 800 points late Tuesday and early Wednesday, as Trump’s unexpected victory became certain. They then recovered to be down about 200 points early Wednesday morning. Futures in the tech-heavy NASDAQ and the S&P 500 also managed to recover from overnight lows, down 76 points and 23 points, respectively. But in morning trading, the Dow was up slightly, while the NASDAQ was relatively flat.
Around the world, stock indices reacted to the unexpected news of a Trump presidency in different ways. In Asian, stocks slumped to their lowest levels since June. In Europe, stocks pared early losses, with the Stoxx Europe 600 down less than one percent. The FTSE 100 in London was also down less than one percent, and the DAX index in Germany was also down about one percent in late-day European trading.
So far, Trump’s victory has not proven to be a Brexit-like event, with markets crashing around the world, as many had predicted. A victory by Democrat Hillary Clinton was thought to be priced into a market, while a Trump victory was widely viewed as an outlier that would send stocks reeling.
What happens when the bell rings in New York minutes from now remains to be seen. Trump has promised to tear up international trade deals, which could undermine the fabric of modern commerce. He’s also pledged to reform the U.S. Federal Reserve, which he has said serves the interest of the Obama administration.
In the run up to the election, many predicted that a Trump win would spell doom for the global economy. Now that he’s won, world markets are starting to test that hypothesis. Less than eight hours after he declared victory and Clinton conceded, it’s too early to tell whether the doomsayers are right.
“His … presidency brings with it many variables not yet priced into the economic narrative from trade, to trade pacts, to multi-national economic agreements, and mutual defense agreements,” Peter Kenny, senior strategist at the Global Markets Advisory Group, said in a morning note.
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