Stock market nears record high after election

The Dow Jones Industrial average surged toward a record close on Wednesday after shaking off the after-shock of Donald Trump’s surprise victory in the U.S. presidential race Tuesday night.

The Dow finished the day at 18,589 — up about 257 points to its highest close since August — after briefly crossing into record territory above 18,600. Meanwhile, the S&P 500 index closed at 2,163, up about 24 points; while the Nasdaq climbed about 58 points to close at 5,251.

The turnaround by all three major indices was remarkable in light of pre-market trading that saw Dow futures plunge nearly 900 points, and both the Nasdaq and S&P 500 futures fell by the maximum amount they’re permitted to fall before trading restraints kick in.

Bill Wood, a certified financial planner and a partner at The Advisory Group in Centerville, attributed the market volatility to uncertainty surrounding Trump, who has promised to shake up the status quo, while Democrat nominee Hillary Clinton was viewed as a continuation of current government and administrative policies.

“The issue is uncertainty, and that is compounded by the uncertainty that is both domestic and global,” Wood said. “I think our trading partners are understandably perplexed and a little bit skiddish because they’re concerned that Trump is going to be a little bit more isolationist in terms of trade. If the deal is not right for the U.S., then there’s no deal.”

Trump’s election jeopardizes the Trans-Pacific Partnership agreement that would eliminate many barriers to trade between the United States, Australia, Japan, Vietnam, Chile and a host of other countries. That uncertainty was reflected in the worldwide markets as Trump made gains Tuesday night against most poll predictions.

“There was just a ripple effect that quickly went around the globe as foreign markets were seeing Trump not only doing well but looking like he was going to win,” Wood said. “It really shook up Asian markets that stood to benefit most from TPP. And our traders had to reposition to respond to the foreign markets.”

Japan’s Nikkei index fell nearly 400 points, and Hong Kong’s Hang Seng index dropped more than 800 points as election results were being tallied, leading the decline in the the U.S. markets.

But the volatility subsided as several sectors poised to benefit from Trump’s victory posted big gains, including the pharmaceutical and bio-tech industries, which had seen sharp declines in their stock prices on the expectation that Clinton would become president.