Following the US election results, Wall Street experienced a significant jump with the Dow Jones Industrial Average marking a 3.6% increase in a single day, deviating from the past trend of concentrated growth in big tech companies. The market reacted positively to the new administration's economic credentials, particularly for Trump supporters, viewing it as a vindication and relief from the uncertainty that had been looming due to the possibility of a contested result and social upheaval.
The global economic landscape prepares for potential changes as America's shift towards protectionism could lead to challenges for countries like Australia. Concerns arise about the return of inflation and permanently higher interest rates stemming from a more protectionist stance that targets China, ultimately affecting economies interconnected with the US. Amidst all these economic shifts, attention is drawn to the money market, a crucial determinant of financial stability, where US money markets have been signaling an unexpected rise in interest rates for the past six weeks, contrary to the rate-cutting cycle initiated by the US Federal Reserve. This anomaly has sparked fears that interest rates may remain higher for a longer duration, potentially impacting Wall Street and global stocks if sustained.