As the hours have passed and markets reacted, we take another opportunity to see how wealth managers see the impact of Trump's victory.

A day after the results of Donald Trump’s presidential win over Vice President Kamala Harris were confirmed – and with the Republicans also securing a majority in the Senate – we carry more reactions. (As of the time of going to press, results for the House of Representatives are not complete.)

The decisive result for the 45th President, who lost the 2020 race, and is now winning an historic comeback victory, has shocked some commentators inside and outside the US, while also highlighting how areas such as inflation, immigration, foreign policy and social issues (campus radicalism over Israel, abortion, crime, “woke” culture) have roiled the American body politic. 

Investors and wealth management asset allocators, both in the US, and overseas, have much to ponder. (See an early set of analyses here and here.) 

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Tan Min Lan, Asia-Pacific head of chief investment office, UBS Global Wealth Management
In equities, we expect the S&P 500 to reach 6,600 by the end of 2025, from 5,929 at present, driven by solid US growth, lower interest rates, and enthusiasm over AI. Technology, utilities, and financials are among our preferred sectors. The key potential beneficiaries of deregulation – financials and energy – led the S&P 500 to a fresh record high on Wednesday. That was in line with our view that these sectors would likely outperform in the event of a Trump victory. The tech sector also advanced. The industry could face headwinds from trade tensions, but we do not believe this will outweigh the structural growth story over the medium term, including optimism over the accelerating commercialization of AI.

In fixed income, investors have initially focused on the potential that a more expansionary fiscal policy will contribute to higher inflation and a slower pace of Fed rate cuts. The 10-year Treasury yield has climbed from around 3.8 per cent at the start of October to 4.43 per cent at the time of writing. In our view, the increase in yields has gone too far and offers a chance for investors to lock in attractive yields as the easing cycle continues.

In currencies, the US dollar gained renewed momentum from Trump’s win, with the 1.7 per cent gain in the DXY index being the largest one-day advance in two years. However, we expect such gains to fade over the medium term. The dollar’s overvaluation and the US’s significant twin fiscal and current account deficits are likely to weigh on the currency over time. Investors should therefore consider using current dollar strength to diversify into other G10 currencies.

The price of gold eased from recent record highs. But looking ahead, we believe that higher deficits, geopolitical uncertainty, and continued central bank buying should lead to upside over the coming months. We have a $2,900/oz target for September 2025 versus $2,670/oz at the time of writing.

Hani Redha, multi-asset portfolio manager at PineBridge Investments
President elect Trump’s policies are described as “run hot.” Fiscal thrusts through cutting taxes heat up growth. Reversing immigration which during an earlier wave of inflation cooled down the tightness and cost escalation from the labor market. And tariffs, inflationary to US consumers although by making it more difficult for imported goods. 

Yet at the same time a cooler on export-centric countries where the US is an important export channel. As a result, expect upward pressure on the US rates curve and US dollar. While this at some point would also hurt stocks, it’s presently thought to be positive for US stocks for growth reasons, while a mild negative to exporters from China, the eurozone, and other Asian manufacturers who export a high percentage of their GDP. 

US stocks are likely to rally as their own products will face a more protected domestic market, and cutting taxes and deregulation is also part of the election narrative.

These impacts will likely be priced quickly, with Trump capable of executing quickly, particularly on immigration changes as well as imposing tariffs on China – both through executive action. Trump also seeks to stoke animal spirits through deregulation – another area where he can move with executive authority for the most part.  

To tariff other countries more broadly at a lower rate, Congress will need to have their say which will slow things down. So too on issues of taxation. Tax cuts will not kick in until 2026, yet we expect markets nonetheless to price in their benefits long before that.

Richard Flax, chief investment officer at Moneyfarm
In the end the US election result wasn’t much of a cliffhanger. The Republicans, and Donald Trump, have won a fairly comfortable victory, recapturing the White House, the Senate and, in all likelihood, holding onto the House of Representatives as well. Such a clear victory removes at least one important negative scenario – we shouldn’t see a contested election and can hope for a smooth transition of power.

The initial market reaction has been quite sharp – with US equities and the US dollar rallying and US bond yields rising. Measures of equity market volatility have also fallen. That reaction has reflected the likely contours of US policy going forward. We’d expect to see lower taxes, higher trade tariffs and larger fiscal deficits. That should translate into stronger growth and, potentially, higher inflation. In that scenario US equities might look better than global peers, which are overall more exposed to global trade. So, good for equities, for now, and not so great for US bonds. 

There are some other considerations. Higher US tariffs will likely elicit a reaction from trade partners. Higher tariffs should dampen global growth and boost inflation, as some of those tariff increases get passed onto consumers. In a similar vein, candidate Trump has argued for a weaker dollar, but the policy mix might suggest the opposite. One solution could be lower policy rates, but it’s tough to justify that if growth and inflation are both accelerating. 

Immigration has been another focal point of the campaign – with Republicans arguing strongly in favor of more curbs. Immigration has been an important driver of growth and of supply of labor in recent years. If curbs on immigration are successful, we could see wage inflation pick up again, complicating life further for the US Federal Reserve.

Finally, on the fiscal side, Republican policies, as stated, look set to increase the fiscal deficit – even if tariff revenues might provide some benefit. Financial markets have been willing to fund the US deficit, but long-term debt dynamics in the US and elsewhere look challenging and the cost of debt could drift higher. 

So, we’ve got some clarity from the election, and sooner than we might have expected. The policy mix is likely to be supportive for US businesses, with an emphasis on lower taxes and fewer regulations. But the policy challenges – government debt, immigration and trade tariffs – haven’t gone away. 

In terms of our portfolio positioning, our exposure to equities remains relatively high compared with history across most of our portfolios. We continue to have a meaningful exposure to US equities that could benefit from some of these trends. Inflation remains a concern and we have maintained our exposure to inflation-linked bonds. We have kept our exposure to European equities relatively low, and reduced it in some cases, on concerns over the outlook for European earnings.

We have been cautious on longer-dated US government bonds, although we see that the yields have risen quite sharply over the past month or so, and that could create opportunities going forward.