Financial Markets Plunge, Then Rebound On News Of Trump Win

Overseas stocks tumbled Wednesday as Donald Trump emerged as the shock victor in the U.S. presidential election. They rebounded nicely later in the morning, however.

Earlier, investors had appeared persuaded that Hillary Clinton, seen as a more stable choice, would prevail.

At one point, Dow futures plunged more than 4 percent and Japan’s major index nosedived more than 6.1 percent, its largest drop in years. The Mexican peso likewise tumbled and investors looking for safe assets bid up the price of gold.  Futures tied to the broader S&P 500 and NASDAQ 100 fell more than 5 percent around midnight.

Trading in S&P and NASDAQ futures was briefly paused early Wednesday, CNBC reported. That’s seen as a sign that the New York Stock Exchange could activate its circuit breakers sometime after U.S. markets open Wednesday. The circuit breakers – mandatory “time outs” for Wall Street traders – kick in when the S&P500 plunges 7 percent from the previous day’s close, with additional breaks for 13 percent and 20 percent drops.

“Right now, the markets are heading for the hills, but we’ll see,” Robert Tipp, chief investments strategist for global bonds and foreign exchange at Prudential Fixed Income told CNBC. “That’s a function of fear as much as fact.”

During the campaign, Trump threatened to rip up trade deals like the North American Free Trade Agreement. He pledged to greatly restrict immigration to the U.S and to build a wall along the United States’ southern border and force Mexico to pay for it. 

On news of his victory the Mexican peso’s value tumbled 13 percent, leaving the currency above the 20 peso per dollar mark for the first time since 1994.

But the lack of clear policy details has left many worldwide uneasy over the future direction of the U.S. economy. Share prices began tumbling as soon as Trump first gained the lead in the electoral vote count. 

By the time Hillary Clinton called Trump to concede, financial markets appeared to have steadied somewhat, but analysts predicted days of turmoil. 

The Associated Press contributed to this report.