The U.S. markets had a historic day as stocks surged following the presidential election results, with major indices like the S&P, Nasdaq, and Russell 2000 all making substantial gains. The S&P 500 jumped 253 basis points, closing at 5,929, bolstered by a strong $740 million Market-on-Close (MOC) buy order. Other indices followed suit, with the Nasdaq up 274 basis points and the Russell 2000 climbing 584 basis points. Overall trading volume was robust, with 18.7 billion shares exchanging hands—well above the year-to-date daily average of 11.5 billion shares. Meanwhile, the VIX volatility index saw a significant drop, reflecting diminished investor fear and an increased appetite for risk.

Key Market Movers and Sectors

The market rally was widespread, but certain sectors saw especially strong momentum. Small caps, banks, and deregulation beneficiaries received substantial attention, with gains across the board. Tech stocks, notably Tesla, soared by 15%, buoying the sector further. In contrast, sectors vulnerable to policy shifts or reliant on government funding, such as housing, Medicaid, hospitals, and renewable energy, lagged behind.

With the U.S. 10-year Treasury yield bouncing back to 4.43%, a significant shift in investor sentiment was clear. There was a broader shift towards risk-on assets, with institutional investors expected to rebalance their portfolios towards more pro-cyclical and reflationary trades. As noted by Goldman Sachs Prime Brokerage, institutional portfolios had already started de-risking in anticipation of election outcomes, but this bullish market may prompt renewed interest in cyclical plays as well as seasonally strong sectors.

Desk Activity and Institutional Flow

Trading floors experienced a remarkably high activity level, rated a 9 on a 1-10 scale for overall execution and participation. Our desk reported a +12% buy skew with a 45 basis points advantage over the 30-day average. Large Order (LO) flows ended with net buying of $6 billion, with particular interest in large-cap financials. Hedge funds were actively repositioning, with a clear preference for financials and macro products while lightening their positions in healthcare. The net effect resulted in a benign group skew, finishing at around $200 million to buy.

After-Hours Earnings Highlights

After the bell, several major companies reported their quarterly earnings with mixed results:

• LYFT surged by 25% after beating estimates and raising guidance.
• QCOM gained 10% on a beat-and-raise, reaffirming strong forward momentum.
• GILD rose by 1.8% with solid earnings and reiteration of its full-year guidance.
• UPWK increased by 7% after outperforming expectations.
• MTCH dropped by 12%, as softer revenue and third-quarter results came in below expectations.
• ARM declined by 4%, providing guidance slightly below street estimates.

The day’s trading reflects a potent combination of post-election optimism, institutional repositioning, and renewed appetite for risk assets. As markets digest the election results and await further clarity on policy directions, investors appear eager to rebalance portfolios, with an eye toward sectors likely to benefit from pro-cyclical and reflationary trends. Going forward, the focus will be on how these themes evolve, particularly as we approach the year-end and the onset of seasonal trends.

With more earnings announcements on the horizon, investors will be closely watching for further indications of economic resilience and sector-specific strengths.