Investors bet on Trump's victory as Wall Street bank stocks rise in after-hours trading
Due to investors' expectations that Trump will win the presidential election, major bank stocks in the U.S. rose in after-hours trading. JPMorgan Chase, Citigroup, and Morgan Stanley increased by nearly 5%, while Goldman Sachs, Bank of America, and Wells Fargo rose by over 4%. Analysts pointed out that Trump's promises to relax financial regulations will benefit bank stocks, but his tariff and immigration policies may pose inflation risks
According to Zhitong Finance, U.S. bank stocks rose in after-hours trading as investors anticipated Trump's victory in the presidential election. JPMorgan Chase (JPM.US), Citigroup (C.US), and Morgan Stanley (MS.US) rose nearly 5%, while Goldman Sachs (GS.US), Bank of America (BAC.US), and Wells Fargo (WFC.US) rose over 4%.
As major bank stocks rise, traders are focusing on the outcome of the White House campaign. According to statistics, former President Trump is currently leading, although results from several key states have yet to be announced. Given the Republican Party's stance on financial deregulation, bank stocks are expected to benefit under Republican control. TD Cowen analyst Jaret Seiberg noted that the relaxation of regulations by the Consumer Financial Protection Bureau (CFPB) is particularly favorable for financial companies.
In a recent report to clients, Seiberg wrote, "Trump is the kind of candidate you ignore what he says and focus on what you expect him to do. That’s why he promises to relax financial regulations, as his regulators may roll back much of the CFPB's enforcement agenda and reconsider the safety and soundness changes for large banks."
Seiberg stated that trading banks could particularly benefit from the potential reduction in capital requirements, the retention of credit card late fee policies, and assistance with cryptocurrency regulation. However, he warned that Trump's tariffs and immigration plans pose downside risks that could lead to inflation