Stock futures, bitcoin and dollar rise as Trump poised to win

New York (CNN) — US stock futures rose early on Wednesday and bitcoin jumped as Donald Trump was headed for wins in the battleground states of Pennsylvania, Georgia and North Carolina, shrinking Kamala Harris’ possible paths to victory.

Futures on the Dow climbed 2.84%, while the S&P 500 rose 2.2%. The US dollar index hit its highest point since July.

Cryptocurrencies, which are considered part of the so-called Trump trade, jumped as well. Bitcoin surpassed $75,000, hitting an all-time high during early morning Wednesday. It surged past its previous all-time high of $74,000 on Tuesday night. Trump has voiced his support of cryptocurrencies in the past.

Dogecoin, the volatile cryptocurrency championed by Elon Musk, a high-profile backer of Trump, rose by as much as 25% Wednesday against Tuesday’s closing level, though those gains have since been pared back to 16%. The cryptocurrency has surged almost 31% since the start of the week.

The Dow closed 425 points higher Tuesday or 1% up, the S&P 500 gained 1.2% and the tech-heavy Nasdaq climbed 1.4%, all underscoring investor optimism as Americans cast their ballots.

Historically, stocks have often risen on Election Day. This marks the sixth straight Election Day gain for the S&P 500 and Nasdaq.

Mark Haefele, chief investment officer of the wealth management unit at UBS, noted that S&P 500 futures and Russell 2000 index futures for smaller listed US companies were up, “likely on anticipation of stronger domestic growth, increased (mergers and acquisitions) activity, an extension to personal tax cuts and hopes of lower corporate taxes” as a result of a Trump victory.

“The prospect of a clear-cut election outcome may also be driving futures higher, given reduced uncertainty about the future,” he wrote in a note.

Meanwhile, Mohit Kumar, economist at Jefferies, said financial companies and smaller companies were likely to lead further gains in US stocks.

“We also expect US equities to continue to outperform Europe and global indices,” he added in a note.

The Stoxx Europe 600 index, the benchmark for the region, was up 1.3%. Germany’s DAX and France’s CAC rose 0.8% and 1.4% respectively, while London’s FTSE 100 was trading 1.3% higher on the day.

US stocks have historically moved higher in the months after elections regardless of the result. “Most stock price movements over time are driven by earnings, inflation and interest rates,” said Adam Turnquist, chief technical strategist for LPL Financial. “Policy does matter, particularly tax and trade policy, but not as much as some might think.”

Traders are bracing for a turbulent week. Just two days after Election Day, the Federal Reserve will announce its latest interest rate decision, the first since it cut rates by half a point. The Fed’s announcement comes amid new data showing signs of a cooling US labor market, adding another layer to an already stacked week for markets.

Anna Cooban and Olesya Dmitracova in London contributed reporting.

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