US futures, dollar surge as Trump gains early lead. How markets have reacted to White House race

Betting markets were already heavily favouring Trump, while The New York Times’ election model projected an 89% chance of him securing the White House. US Treasury yields hit four-month highs amid anticipation that a Trump administration would bring tax cuts, restricted immigration, and new tariffs.

Analysts believe such policies would add upward pressure on inflation and bond yields, while limiting the Federal Reserve’s capacity for more rate cuts in the future. S&P 500 futures gained 1.2%, while the Nasdaq futures rose 1.3% on the back of Trump’s promised tax cuts and reduced regulatory hurdles.

The dollar rose against the yen, reaching 153.94, while the euro fell 1.5% to $1.0772. The offshore yuan also weakened, triggering reports that Chinese banks were intervening to slow the currency’s decline amid heightened tariff concerns.

In India, equity benchmarks Sensex and Nifty rose in early trade on the back of gains in IT stocks.

"There's very much an emotional component in markets associated with the vote at this point, because it has become a consensus view that if Trump wins, stocks are going up. People are trying to get ahead of it. I don't think there's any meaningful information about what Trump's policy will be until we have much clearer results in terms of both Congress and the presidency," said Michael Green, portfolio manager at Simplify Asset Management.

Ben Emons, founder of Fedwatch Advisors, said markets are growing confident that the election result will be called and that a 'red sweep' of Congress is possible.

“US Treasury yields are rising sharply in anticipation that a Republican Congress will pass sweeping tax reform and tax cuts to create conditions for a favourable investment climate in the U.S. With uncertainty seen as negligible, there is a relief rally in liquidity-sensitive assets like crypto and economy-sensitive assets like small caps," Reuters quoted Emons as saying.