U.S. stocks surged to record highs Wednesday after Donald Trump’s 2024 election victory, marking a remarkable comeback for the former president. The Dow Jones, S&P 500, and Nasdaq Composite each closed at all-time highs, driven by investor anticipation of pro-growth policies including tax cuts and deregulation. However, renewed trade tensions could increase deficits and inflation, a point highlighted by the surge in U.S. Treasury yields, with the 10-year note yield climbing to 4.479%. Bitcoin also reached a new record above $75,000, and the dollar recorded its largest single-day rise since September 2022.

As financial stocks led the S&P 500, smaller U.S.-focused stocks rallied, particularly benefiting from prospects of looser regulations and lower taxes. The Russell 2000 hit a three-year high, though some analysts warn that rising Treasury yields might weigh on smaller companies reliant on borrowing. While the real estate and utilities sectors declined, weighed down by inflation concerns and potential Federal Reserve policy adjustments, sectors like energy, cryptocurrency, and financials saw notable gains. Investors are closely watching for signs of a favorable congressional balance for Trump, which could further facilitate his agenda.