The United States’ 47th Presidential election concluded this week with the appointment of Donald Trump to his second term in the White House after a tumultuous race.
Fueled by the promise of lower corporate taxes and the Federal Reserve’s decision to slash interest rates by another 25 basis points, the stock market soared, with both the S&P 500 and Nasdaq Composite indexes setting record highs.
Bitcoin also surged to a new record high above US$77,000, bolstered by the Republican party’s gains in the midterm elections. With the Senate secured and the House of Representatives within reach, the prospect of a more favorable regulatory landscape for cryptocurrencies in 2025 has ignited investor enthusiasm.
As the dust settles on the 2024 presidential election, the full extent of Trump’s policies on the economy remains to be seen.
1. Big Tech reacts to Trump’s election win
The election of Trump to the White House on November 6 has been perceived as a victory for CEOs, particularly those in the tech industry who have maintained close ties with policymakers. With promises to lower corporate taxes and loosen regulations, the new administration could provide a more favorable business environment.
That sentiment was reflected in the stock market this week, with a handful of tech companies witnessing growth of well over 5 percent. After replacing Intel (NASDAQ:INTC) in the Dow Jones Industrial Average on November 1, NVIDIA (NASDAQ:NVDA) surpassed Apple (NASDAQ:APPL) to become the world’s most valuable company for the third time this year.
It achieved a market capitalization of US$3.43 trillion compared to Apple’s US$3.38 trillion as markets wrapped on Tuesday (November 5) and reached a historic valuation of US$3.6 trillion on Wednesday (November 6). Its share price is up 7.28 percent for the week.
In addition to NVIDIA’s gains, tech giants Broadcom (NASDAQ:AVGO) and Amazon (NASDAQ:AMZN) also experienced significant share price increases of 8.29 percent and 5.87 percent, respectively. Meanwhile, shares of Apple, Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META) and Taiwan Semiconductor (NYSE:TSM) saw more modest gains of 2.63 percent, 3.13 percent, 4.47 percent and 3.87 percent.
Investors may be optimistic after a Reuters report suggested that Trump may be planning to dial back antitrust measures enforced by the Biden administration and that he may even disrupt the proposed breakup of Google (NASDAQ:GOOGL), whose share price is up 5.09 percent for the week.
2. Bitcoin sets new price record
After a slump early in the week, Bitcoin reached a new all-time high after Trump was elected as the 47th president of the US in the early hours of Wednesday.
In a presidential race initially considered the closest in modern US history, the Republican candidate took an early lead by securing votes in North Carolina, Georgia and Pennsylvania, three out of seven key swing states.
At 5:34 AM EST on November 6, the Associated Press reported that Trump had won over his fourth swing state, Wisconsin, securing enough electoral college votes to be declared the winner.
As Americans cast their ballots and Trump’s prospects improved, the price of Bitcoin rose in tandem. It went from around US$68,750 on the morning of November 5 to over $75,000 just after 1:36 AM EST on November 6, surpassing its previous record of $73,000 set in March 2024.
Bitcoin performance, October 10 to November 7, 2024.
Chart via CoinGecko.
On November 6 at 5:35 AM EST, after Trump declared victory, Bitcoin was trading at around US$73,000. The price continued to rise as the markets opened on Wednesday, briefly breaking past US$76,000 before retreating slightly as Western markets closed. It traded in the US$74,000 range in Asia and retook US$76,000 at around 11:00 AM EST.
Unlike the short-lived rallies seen in recent weeks, Bitcoin has managed to maintain its gains so far. A Trump presidency is viewed as beneficial to the cryptocurrency industry, as his campaign promised to loosen regulations and replace regulators like US Securities and Exchange Commission Chairman Gary Gensler, who has had a contentious relationship with the industry’s major players.
Republicans also took a majority of the US Senate and are on track to take the House of Representatives, although the votes are still being tallied. With a more “crypto-friendly” political landscape, industry insiders are optimistic that innovation and adoptions will accelerate.
Bitcoin closed the week over 10 percent higher at US$76,739, slightly below its weekly high of US$77,239 reached earlier on Friday (November 8).
3. Tesla shares hit year-to-date high
Next to Bitcoin, Tesla (NASDAQ:TSLA) is the biggest winner after Trump’s win this week.
Its share price gained over 13 percent on Wednesday morning and is up over 31 percent for the week, trading at US$321.22, its highest level year-to-date.
Tesla performance, November 4 to 8, 2024.
Chart via Google Finance.
Tesla CEO Elon Musk actively supported Trump in the weeks leading up to the election, contributing roughly US$130 million to his campaign efforts. In September, Trump indicated his intention to offer Musk a role in the White House, focusing on streamlining government operations and cutting federal spending.
To achieve this, Musk has boldly predicted that he could eliminate at least US$2 trillion of federal spending. While he hasn’t specified exactly where these cuts would come from, reports suggest that Musk and Trump may target agencies responsible for regulating industries in which Musk’s companies operate. These agencies could include the Federal Aviation Administration (FAA), the Federal Communications Commission (FCC) and environmental agencies.
During his campaign, Trump also expressed intentions to reverse tax incentives and rebates for electric vehicle (EV) purchases established during the Biden-Harris administration. Although this might seem counterproductive to Musk’s Tesla operations, the CEO could be focusing on his other venture, SpaceX, which has forged strong ties with the federal government’s defense agencies.
In March it was reported that SpaceX had signed a contract worth US$1.8 billion in 2021 to build spy satellites with the National Reconnaissance Office, and the company won contracts for nine launches under the National Security Space Launch (NSSL) Phase 3 Lane 1 program on October 18.
However, issues between the FAA and SpaceX — such as a US$633,009 fine imposed by the agency in September for procedural violations related to Falcon 9 launches in 2023 as well as its decision to delay the test launch of SpaceX’s Starship mega rocket — have created tension between Musk and the agency.
Musk may have a vested interest in reducing the FAA’s regulatory oversight of SpaceX’s operations, as diminishing the agency’s funding could potentially clear a path for expanded commercial space exploration.
4. Super Micro shares audit update, reports preliminary earnings
Super Micro Computer (SMCI) (NASDAQ:SMCI) announced preliminary Q1 2025 results on Tuesday (November 5) with a renewed net sales forecast of US$5.9 billion to US$6 billion, missing analysts’ expectations of US$6.79 billion and slightly below the company’s previous guidance range of US$6 billion to US$7 billion.
The company also provided Q2 guidance, projecting net sales in a range of US$5.5 billion to US$6.1 billion for the quarter ending on December 31, 2024. This news led to a share price drop of over 24 percent on Wednesday morning.
The company also shared an update from an independent Special Committee formed to investigate concerns over the company’s accounting records initially raised by EY. In a statement, the committee said it found no evidence of fraud or misconduct by management or the Board of Directors in its investigation, and recommended that SMCI conduct “a series of remedial measures…to strengthen its internal governance and oversight function.’ A full report is expected next week.
Meanwhile, SMCI is working to file its delayed Form 10-K and regain compliance with Nasdaq listing requirements. After being issued a notice of noncompliance, companies have 60 days to either file the Form 10-K or submit a plan to regain compliance. If SMCI fails to do either and is delisted from the Nasdaq, it faces potential early repayment of up to US$1.725 billion in March 2029 of convertible notes.
5. Arm stumbles on Q2 revenue growth
Arm Holdings (NASDAQ:ARM) released its Q2 FYE25 results on November 6 (Wednesday), showing that revenue growth slowed to just 5 percent in the September quarter, down from 39 percent in the previous quarter.
This slowdown in revenue growth was primarily attributed to a decline in licensing revenue, the fees that Arm receives from companies that use its IP to develop their own chips. Licensing revenue was US$330 million in Q2, compared to US$472 million in Q1, a difference of 43 percent.
Arm Holdings performance, November 4 to 8, 2024.
Chart via Google Finance.
However, the decline was partially offset by royalty revenue, which increased by over 10 percent to US$514 million. Royalty revenue refers to the fees that Arm receives from companies that use its IP in products that are sold to end consumers.
While Arm’s share price initially dipped following the report, it rebounded strongly, up nearly 10 percent midday on Thursday (November 7). This positive shift likely reflects investor confidence in Arm’s strong position within the tech industry. The company collaborates with major tech players like Apple, Samsung (KS:5930) and NVIDIA, and its chips are essential components in a wide range of consumer and industrial electronics. The company concluded the week with its share price rising by 5.16 percent.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
