The presidency of Donald Trump will have a significant impact on global markets, with both short-term and long-term consequences. With Donald Trump heading back to the White House, Wall Street is anticipating the potential for lower taxes, deregulation and a U.S. president who is quick to sound off on everything from the stock market to the dollar.

“Maybe it is a short-term boost to the markets, but the policies that President Trump might bring could create a lot of volatility, especially if he raises tariffs on certain countries, how that counters China’s fiscal stimulus, what it means for geopolitics. I think geopolitics, the landscape could change rapidly. There could be escalations in certain countries, by certain countries. So, I do expect some volatility until we have total clarity,” says Punita Kumar Sinha, Pacific Paradigm Advisor.

For a Trump administration, “markets are basically thinking it’s pro-growth, even if it comes with higher inflation and higher interest rates,” said David Bianco, Americas chief investment officer at DWS Group.

The potential implementation of tariffs – which Trump has vowed to increase by 10% on imports, and 60% on goods from China – could make a key difference in how investors approach asset markets in coming months.

CRYPTO
With a Trump administration expected to take a softer line on cryptocurrency regulation, bitcoin is another potential winner . The world’s largest cryptocurrency rose to an all-time high on Wednesday.

STOCKS
Trump’s promise of less regulation and lower taxes for big corporations, more oil production and tough immigration policy point to stronger growth and inflation, viewed as positive for equities. Sectors such as banks, technology, defense and fossil fuels are likely to benefit.
His plan to cut the corporate tax rate to 15% from 21% would raise S&P 500 earnings by about 4%, Goldman Sachs estimates.

BONDS
Investors have been growing increasingly alarmed about the scale of U.S. government debt and fiscal deficits adding to it, with worries that it will push up borrowing costs, or Treasury yields.Trump’s spending plans could add $7.5 trillion to deficits over 10 years, according to one estimate, far greater than what Harris had proposed. Treasury yields rose almost 50 basis points in October, when markets were pricing in a higher likelihood of a Trump win.

CURRENCY
A Trump win is also likely to suppress growth in Europe and Asia, as tariffs and other policies put pressure on those economies. More pressures on the euro, yen, Swiss franc and other currencies, and higher inflation will reduce the room central banks there have to cut rates as needed. Analysts expect global yields to rise.

COMMODITIES
Trump will aim to maximize U.S. oil and gas drilling by expanding federal leasing and rolling back environmental regulation where possible – a policy agenda that all but guarantees the country will remain the world’s top petroleum producer. That robust supply could help keep U.S. West Texas Intermediate crude futures , which dropped around 4% so far this year, relatively low.

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