Trump Victories Cause Stock Turbulence


Stocks fell sharply Tuesday night, as investors saw Republican nominee Donald Trump leading Democratic opponent Hillary Clinton in multiple swing states, including Florida and Virginia.

Dow Jones futures, which at one point were higher by 100 points, suddenly sank more than 750 points in overnight trading. They eventually settled at around 450 points lower.

Standard & Poor’s 500 index futures fell 58 points, while Nasdaq futures fell 123 points.

Dow Jones data show that many of biggest gains have come following wins by Democrats, including a 1.5 percen rise after Bill Clinton’s second-term victory Nov. 5, 1996, and a similar jump for Franklin D. Roosevelt on Nov. 3,1936.

The Mexican peso, which has risen and fallen with Clinton’s perceived chances of winning, fell as much as 4.6 percent, to 20 per U.S. dollar.

That mark is its lowest level since Nov. 4, before FBI Director James Comey said that even after a second glance from the FBI, Clinton wouldn’t face charges for her handling of emails as secretary of state.

Stocks rose throughout Tuesday, reflecting investor confidence in Clinton’s chances. The Dow Jones Industrial Average spiked 130 points by midday, while the peso boasted a two-month high at 18.5 per dollar.

Markets had favored a Clinton victory because of anticipated policies on trade.

A Trump victory would likely send markets into several days of wild swings.

“I think this could be the second strike of populism if Trump wins and I think that it’s probably a bigger surprise for international markets than it is for the U.S.,” Jack Ablin, CIO at BMO Private Bank, told CNBC. “Right now it’s just emotional. Everything from the last two days would get undone, and then we’d have to take it down. We could see a 600 point (Dow) reversal.”

“The knee jerk reaction is lower because of his protectionist policies and what his foreign policies mean for countries doing business in the rest of world,” said Brian Kelly of Brian Kelly Capital.

International markets were also rattled.

Japan’s Nikkei stock index dropped 2.2 percent, crude oil slumped more than 3 percent and the dollar surged 3.4 percent against the Japanese yen, while the prices of U.S. Treasury bonds sending yields lower.

The dollar was up 11 percent against the Mexican peso. Gold prices rose 3.5 percent.

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