Global markets were thrown into disarray as Donald Trump won the US presidential election, shocking traders after recent polls indicated that Hillary Clinton would be the victor.
Futures on the S&P 500 Index plunged by a 5 percent limit that triggers trading curbs and contracts on European equities sank more than 4 percent. Gold had its biggest move since the aftermath of Britain’s shock vote to leave the European Union, surging with haven assets including the yen and sovereign bonds. Mexico’s peso tumbled the most since 2008 amid concern US trade policies will become more protectionist under Trump.
Trump was projected to be the winner early Wednesday by the Associated Press and television networks after Wisconsin pushed him over the 270 Electoral College vote threshold needed to become president-elect. The Republicans also retained control of Congress. A Trump victory had been portrayed by analysts as having the potential to unhinge markets that were banking on a continuation of policies that coincided with the second-longest bull market in S&P 500 history. Brexit was the last major political shock and led to the US equity gauge sliding 5.3 percent in two days.
“A Trump win is expected to damage trade,” said James Butterfill, head of research and investment strategy at ETF Securities in London. “Traders are already expressing their worries through a depreciating dollar, which is bad news for European companies.”
Most polls showed Democratic candidate Clinton ahead of Trump going into the vote and websites that took bets on the victor had put her odds of winning at 80 percent or more. Trump has pledged to clamp down on immigration to the US and renegotiate free-trade agreements with countries including Mexico.
S&P 500 Index futures slid as much as 5 percent. Euro Stoxx 50 futures sank 4.3 percent while the MSCI Asia Pacific Index dropped 2.6 percent.
The Mexican peso tumbled as much as 12 percent, breaching 20 per dollar for the first time, while the Japanese yen climbed versus all major currencies.
The euro and Swiss franc rose at least 1.2 percent against the dollar, while gold jumped 3.3 percent, the most since Brexit. Crude oil slipped 1.4 percent, while the 10-year US Treasury yield dropped three basis points to 1.82 percent.
S&P 500 futures tumbled by the maximum 5 percent loss permitted on the Chicago Mercantile Exchange before trading curbs are triggered, then pared their decline to 3.4 percent as of 7:51 a.m. in London. The restrictions last came into force in the wake of the Brexit vote and set a floor price for the contracts through the remainder of the overnight trading session.