Former President Donald Trump defeats Kamala Harris to win US presidency for second time

Former President Donald Trump has been elected as the 47th president of the United States, according to the Associated Press and other major news networks.

The AP made the decision to call the race for Trump after he won the key battleground state of Wisconsin, the news agency said. Trump had also emerged victorious in a host of other crucial swing states, including Pennsylvania, Georgia and North Carolina.

Trump had previously declared victory earlier on Wednesday, saying the results give him a "powerful mandate" as he returns to the White House for a second four-year term. It is the culmination of a stunning political comeback for Trump, who had been defeated by current President Joe Biden in the last presidential election in 2020.

Meanwhile, prior coverage by the AP and other regional networks showed Republicans had taken a majority in the Senate, the upper chamber of the US Congress, and were also on track to win the House of Representatives, raising the possibility of a Republican sweep in the 2024 elections.

Such a scenario would present an easier path for Trump to enact major policy changes if elected.?

US stock futures jumped on Wednesday as traders gauged the increasing likelihood of both a victory for Trump and the Republican Party taking control of Congress.

Along with the spike in futures, so-called "Trump trades" rallied. The US dollar was on course for its biggest single-day uptick since March 2020 against its other major currency pairs, with the Mexican peso slumping in particular.?Bitcoin, the world's most popular cryptocurrency, also touched an all-time peak of $75,060.

In recent months, these assets have often been seen as proxies for the former president's chances of winning. Trump's tariff and immigration plans have been viewed as possibly inflationary, which could bolster the greenback. At the same time, Trump has become an outspoken backer of the cryptocurrency industry, fueling bets on Bitcoin.

Elsewhere, the yield on the benchmark US?10-year?Treasury bond reached its highest level since early July. Yields tend to move inversely to prices.

"Trump trades are in full swing [...]," analysts at ING said in a note on Wednesday, adding that markets are also "pricing in" a clean sweep for Republicans in Congress.

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UBS Analyst See Trump victory, divided Congress would be mild positive for US equities

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UBS analysts see a potential Trump victory paired with a divided Congress as a "mild positive" for U.S. equities, forecasting the?S&P 500?to reach 6,400 by the end of 2025.

A UBS equity strategist said he expects that such an outcome would maintain a moderately favorable environment for stocks, supported by a lighter regulatory load across sectors like real estate, energy, and financials.

A divided Congress could prevent sweeping policy changes, leading to a steady market environment. UBS’s credit team suggests that much of the market has already priced in this scenario, with high-yield spreads near 270 basis points and investment-grade spreads around 80 basis points.

They also project the?10-year Treasury yield?could rise to about 4.4% in this scenario.

However, UBS warns that a clean Republican sweep—though considered unlikely—could also create some volatility. Under this outcome, Golub estimates a slightly lower S&P 500 target of 6,375, while credit spreads could tighten as yields edge higher.

Additionally, UBS’s FX team notes that a full Republican sweep might bolster the U.S. dollar more than a divided Congress would due to expected tax cuts and regulatory shifts.

A Red Sweep would likely bring the corporate tax rate reduction from 21% to 15%, generating an estimated $598 billion benefit over ten years. UBS analysts suggest this could initially boost equities but caution against medium-term impacts, as 2026 is expected to bring a worse growth/inflation mix, driven in part by a possible 60% tariff on a significant portion of Chinese imports, which could trim U.S. GDP by up to 0.6%.

Even under a divided Congress, UBS forecasts an additional $3.1 trillion in government debt over the next decade, posing long-term challenges for fiscal policy and potential upward pressure on bond yields.

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