Stocks are booming after Donald Trump's election victory

Stocks and other financial investments increase after Donald Trump was predicted as the winner the US presidential election and the Republican Party gained control of the Senate.

The Dow Jones Industrial Average jumped more than 1,200 points, or nearly 3%, in early trading Wednesday, while the broader S&P 500 and the tech-heavy Nasdaq Composite each gained more than 2%.

Many investors expect Trump's victory This should lead to faster economic growth and more market-friendly policies.

“Markets are trying to figure out what happens next, but for now the market is pricing in a higher growth and inflation outlook,” said Peter Esho of Esho Capital.

Bitcoin price rose nearly 8% to a record $75,345 before falling back slightly. Trump promised his support for cryptocurrencies during the election campaign. Shares of crypto exchange Coinbase rose 18% and almost all cryptocurrencies rose sharply, including Dogecoin, which rose 17%.

Bank stocks, which could benefit from less restrictive regulations, rose in premarket trading. JPMorgan, the world's largest bank by assets, rose nearly 7%. Capital One rose 11.3%.

Tesla, led by Trump supporter Elon Musk, rose nearly 13%. According to Wedbush analyst Dan Ives, the company's size will give it a big advantage in the electric vehicle market if, as expected, Trump abandons rebates and tax incentives for electric vehicles. The shares of Tesla's competitors largely fell.

Trump is likely to undo some of the Biden administration's efforts to combat climate change. Renewable energy stocks like First Solar and Enphase lost double digits in premarket trading. First Solar was a big beneficiary of the Biden administration's Inflation Reduction Act.

Ryan Sweet, chief U.S. economist at Oxford Economics, expects a Republican-led Congress to extend personal tax cuts passed in 2017 during the first Trump administration while increasing federal spending. President-elect Trump will also likely “use his presidential powers to reduce immigration and impose targeted tariffs against China, Mexico, Canada and the European Union,” Sweet told investors in a report.

Trump has vowed to sharply increase tariffs on imports from China and other countries, dimming the outlook for Chinese exporters at a time when Beijing is betting heavily on increasing production to revive its slowing economy.

Trump Media & Technology Group, the company behind the former president's Truth Social platform, rose 36% overnight as it became increasingly clear that Trump was returning to the nation's highest elected office

“Without a doubt, we see a clear consensus among investors that President Trump would announce higher Federal Reserve interest rates, weaker global growth and greater geopolitical uncertainty, all of which are bullish for the dollar,” said Matthew Ryan, head of market strategy at Global Financial services company Ebury.

The broad U.S. stock market has historically tended to rise regardless of which party wins the White House, although individual party policies can benefit and hurt the profits of different industries.

The S&P 500 has risen nearly 70% since President Joe Biden took office in the 2020 election. The value rose to record levels as the U.S. economy recovered from the COVID-19 pandemic and managed to avoid a recession despite a surge in inflation.

The economy was a key issue for inflation-weary U.S. voters who went for Trump this time, even though mainstream economists said Trump's policy proposals would worsen inflation.

contributed to this report.