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The small-cap-heavy Russell 2000 rose as much as 5% on Wednesday after Donald Trump’s victory.
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Small caps can benefit from Trump’s protectionist trade and deregulation policies.
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Other sectors also made gains with Trump’s re-election.
Small-cap stocks have soared after Donald Trump secured a second term in the White House.
The Russell 2000 rose as much as 5% on Wednesday. The index tracks small-cap companies, which are seen as the main beneficiaries of a Trump presidency. The index is now up about 17% this year.
The Trump administration’s protectionist plan is at least partly intended to protect domestic businesses. During his campaign, Trump promised double-digit tariffs on virtually all U.S. exports, citing that China could face a tax rate of as much as 60%.
In a note ahead of the election, JPMorgan also noted that small caps could benefit from Trump due to deregulation and possible tax cuts aimed at domestically oriented companies.
Small caps weren’t the only sector to jump after Trump’s victory.
Financial stocks also gained ground on the prospect of simpler regulations and tax cuts. Meanwhile, Trump’s supportive stance on cryptocurrency sent bitcoin soaring to a new all-time high.
Among the market losers, however, were clean energy stocks, with stocks like Plug Power and SunRun down more than 10% in pre-market trading. Concerns have grown that the president-elect could try to repeal the Inflation Reduction Act, which provides tax breaks to renewable energy companies.
Read the original article on Business Insider
