Investors have reacted in shock following Donald Trump’s win at the concluded US presidential polls last night.
According to CNN reports, Global stock markets are dropping, Mexico’s currency has tanked and U.S. stocks are poised for a very rough open.
Markets hate uncertainty, and many investors believe Trump’s unpredictable nature and anti-trade stance could bring global turmoil.
“Shock and awe would aptly describe movements of global markets right now,” said Matt Simpson, a senior markets analyst at ThinkMarkets.
Stock futures began tumbling after 9 p.m. ET as it became clear that Hillary Clinton’s chances of winning crucial states such as Florida, North Carolina and Ohio were in serious doubt. She would later lose all three to Trump.
“It is looking like another Brexit-type surprise,” said Ryan Detrick, senior market strategist at LPL Financial.
By comparison, the Dow fell 610 points, or 3.4% on June 24 after Britain’s shocking vote to leave the European Union.
U.K. markets tanked after Brexit. The FTSE 100, the main stock market in London, dropped 3.2% the day after the vote. The British pound had one of its biggest one-day declines on record, falling 9% to $1.33, then the lowest it had been since 1985.
The U.K. market has rebounded since then, partially because the weak pound helped support the economy.
The U.S. dollar hasn’t been hit as hard as the pound was — it dropped sharply but then recovered most of its losses Wednesday morning.
While Wall Street is on track for post-election losses, they are not nearly as bad on a percentage basis as those experienced during the 2008 financial crisis when several plunges of greater than 6% occurred.
Wall Street appears to have been caught leaning in the wrong direction before the vote. The Dow raced nearly 400 points on Monday as investors bet that Clinton’s chances of winning improved after the FBI cleared her in the email investigation.
Looking south of the border, the Mexican peso has plunged about 7%, though earlier in the night it had crashed by more than 11% to an all-time low. The currency is on track for its worst day since 1994.
Trump’s anti-Mexico rhetoric has affected the value of the peso for weeks. Trump has talked about renegotiating or even ending NAFTA, the free trade deal between the U.S., Mexico and Canada.
“The Mexican economy is most tied to Donald Trump’s criticism of global trade. It really is ground zero of this discussion economically,” said Nicholas Colas, chief market strategist at brokerage firm ConvergEx.
Investors are turning to assets that are seen as safer bets in times of uncertainty. For example, gold is surging 2.5% and the Japanese yen is climbing against all other major currencies.
Crude oil also took a big hit as cash flees risky assets. Oil prices were down nearly 4% to trade around $44 a barrel.
