Trump 2.0: Wall Street’s Favorite Reality Show Returns (And Your Portfolio’s Already Sweating)

Alright, folks. We did it. We have finally—finally—reached the end of political ad season. Cue the applause, confetti, and deep sigh of relief. Now we can all get back to just scrolling past mattress sales and crypto scam ads. But let’s talk about what really happened here: it’s looking like Mr. Trump is about to become the 47th president of the United States, following his term as the 45th. Yes, folks, the man has come back, and naturally, the financial markets are having a moment.

Some people are shell-shocked. “Who could’ve seen this coming?” they say. Well, as it happens, I did. And now, we’re all in for a wild ride, as this unexpected outcome is set to shake up everything from your 401(k) to that pile of crypto you forgot you still had. So let’s get down to what’s really going on in the markets—and how this might just impact your bank account in ways you didn’t quite plan for.

First up, Dow futures. Ah, yes, the Dow—America’s favorite mainstream media index, aka “the one with the big points.” The Dow’s futures have jumped a cool 700 points in pre-market trading, which will undoubtedly lead to endless breathless headlines and a bunch of people pretending they understand what the Dow actually represents. Now, on the other side, we’ve got the S&P 500 up almost 100 points. This index is what most of us should actually care about, as it’s most closely tied to those all-important retirement funds. But hey, the Dow gets all the press.

Meanwhile, the NASDAQ is riding a 300-point surge, which is practically a flashing neon “Open for Business” sign for active traders. But it’s the Russell 2000—home of the plucky small caps—that’s hogging the spotlight with moves up as high as 4.5%. These stocks have been the underdogs of the Biden era, so there’s a lot of talk that Trump’s policies and maybe a Fed rate cut will finally put them back on the map. These “little guys” might be getting their moment in the sun again, so keep an eye on that.

And speaking of reversals, let’s talk about the VIX—the fear index. It’s not looking nearly as stressed today. In fact, it’s cratering, because this election didn’t end in chaos or a months-long drama like some had feared. Instead, it wrapped up as fast as your favorite Netflix binge. And with fear down, stocks go up, because when people are feeling a little less like a ball of anxiety, they’re willing to put money back into the market.

But let’s talk about why small caps are buzzing. Aside from Trump’s potential policies that could help smaller companies, there’s now a widespread belief that the Fed will start cutting rates. And if that happens, small caps are the ones most likely to soar. In short: brace yourself for a Russell Renaissance.

Over in the crypto world, Bitcoin is doing its own victory lap with a staggering $5,000 surge. Why, you ask? Well, in the last six to nine months, Trump has become quite the Bitcoin fan. Yes, we’re talking about the same guy who once seemed to think Bitcoin was just a fancy way to pay for avocados. Now, he’s all in, and that alone is driving a lot of excitement. Bitcoin believers are already calling for $100,000—and whether that’s realistic or just wishful thinking is anyone’s guess. Ethereum, Bitcoin Cash, and pretty much every crypto with a catchy name are all up big-time too, though not quite at Bitcoin’s level.

Now, let’s get specific about some stocks making waves. Palantir, the Silicon Valley darling, is closing in on $55 after an overnight surge. With this Trump euphoria, the stock seems like it’s on an express train to who knows where. And then there’s Tesla—up 12%. This stock is practically moonwalking at this point. Tesla did very well during Trump’s last term, and with Musk cozying up to the new (again) administration, it’s looking like a strong repeat performance. For Tesla, there’s speculation that Trump could even prevent Chinese automakers from gaining an edge in the U.S. market, which would effectively make Musk’s life even cushier than it already is.

Meanwhile, fintech darling SoFi is up around 6%. Though technically not a small cap, it’s still one of the “little guys” compared to traditional banks. So naturally, a day like today is like Christmas morning for SoFi stockholders. And as for the broader market sentiment, a lot of the Wall Street pros have been caught off guard. I’m not going to name names, but let’s just say even some of the perma-bulls took a “cautious” stance coming into September and missed out on a straight line up. Cue the facepalms.

So, what does this mean going forward? With Trump in office, there’s a strong chance he’ll put pressure on the Fed to get rates down as fast as possible. And if they don’t? Well, there’s always the option to fire Powell, so let’s just say this is going to be a unique dynamic for Fed-watchers.

Long story short, anyone who bet against the market now has a pretty serious case of FOMO. We could see a whole lot of money pouring back in—especially into big tech and, yes, those small caps. So, get your popcorn ready. The market isn’t going to be boring anytime soon.