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Trump stimulus sees Dow Jones hit record high

Trump stimulus sees Dow Jones hit record high

The industry-heavy Dow Jones Industrial Average has jumped to a record high following the election of Donald Trump as US president.

The Dow Jones Industrial Average climbed 0.9 per cent to a record 18,769.5 by midday in New York, powered by financial stocks such as Goldman Sachs and JPMorgan, technology company IBM and Home Depot.

The movement came after the president-elect pledged to cut taxes and deliver a package of infrastructure spending, raising hopes of higher corporate profits.

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However the record high for the Dow Jones Industrial Average was not mirrored in more technology-oriented indices.

The S&P 500 gave up its early morning gains and was trading flat by the afternoon, while the Nasdaq Composite slumped 1.2 per cent, its biggest one-day drop in a month.

The decline was led by companies like Amazon, whose founder and Washington Post-owner Jeff Bezos has clashed with the incoming president, as well as Netflix and Google.

Amazon fell nearly 5 per cent on Thursday (10 November) to a four-month low.

Russ Mould, investment director at AJ Bell, said a drop in certain stocks are textbook knee-jerk reactions to unexpected events. 

However, he said once investors sit down and think more clearly markets will need to consider long-term issues such as protectionism and inflation as potential dangers and a pro-growth agenda as a potential benefit when they address what a Trump presidency may mean.

emma.hughes@ft.com