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The impact of Trump’s victory on equity markets: The power of proximity

Author

Listed:
  • Ferriani, Fabrizio
  • Gazzani, Andrea
  • Taboga, Marco

Abstract

This study provides the first analytical evidence on the reaction of U.S. equity markets to Donald Trump’s victory in the 2024 Presidential election. Leveraging on a novel textual-based measure at the firm level, we uncover significant positive abnormal returns for firms aligned with Trump’s policy priorities. These firms are especially concentrated in the financial, energy, and industrial sectors. This positive equity market response is nonetheless accompanied by rising economic uncertainty, highlighting a potential disconnect between market exuberance and the macroeconomic outlook.

Suggested Citation

  • Ferriani, Fabrizio & Gazzani, Andrea & Taboga, Marco, 2025. "The impact of Trump’s victory on equity markets: The power of proximity," Economics Letters, Elsevier, vol. 247(C).
    • Handle: RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176525000369
    DOI: 10.1016/j.econlet.2025.112199
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    More about this item

    Keywords

    Equity markets; Donald Trump; Abnormal returns; Event study; US 2024 Presidential election;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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