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In the wake of the recent U.S. presidential election, Jim Cramer has connected the surge in the stock market to the election of President-elect Donald Trump and his anticipated pro-business policies.
What Happened: Cramer noted that the conclusion of the election brought relief to traders who are now gearing up for a Trump administration, CNBC reported on Thursday.
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“The fact that we already know the winner is a huge win for the stock market in itself, which makes it a magnet for new money. This election, with its vicious maelstrom of hate and fear, is finally over,” he said.
Tesla Inc. (NASDAQ:TSLA) saw a remarkable rally, closing up 14.75%. Cramer pointed out that Elon Musk, a vocal Trump supporter, might benefit from Trump’s tendency to reward allies. Tech giants like Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Amazon.com Inc. (NASDAQ:AMZN), previously burdened by antitrust issues, also saw gains. Cramer mentioned that cybersecurity stocks surged amid expectations of increased hacking under Trump’s presidency.
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Cramer acknowledged the market’s record highs during the Joe Biden administration and speculated on future market movements with Trump, who has a keen interest in Wall Street.
“Who knows how high they can go with a president-elect who always told me that the Dow Jones Industrial Average was his version of the Nielsen ratings.”
Why It Matters: The market rally following Trump’s election victory reflects a shift in investor sentiment. The Dow Jones index jumped over 1,500 points, reaching a record high. The CNN Money Fear and Greed index moved to a “Neutral” zone, indicating improved market sentiment.
The anticipation of favorable tax policies under Trump’s administration has further fueled the rally. Additionally, a look back at Trump’s first term provides insights into how various S&P 500 sectors might perform under his leadership. While past performance doesn’t guarantee future results, it offers valuable clues for investors navigating the new administration.
