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Trump declares victory, vote counting continues

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Trump-linked stocks, Tesla jump

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Market volatility falls sharply

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Russell 2000 futures soar

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Futures up: Dow 2.86%, S&P 500 2.28%, Nasdaq 1.77%

(Updated at 5:15 a.m. ET/1015 GMT)

By Lisa Pauline Mattackal and Medha Singh

Nov 6 (Reuters) - Futures tied to the S&P 500 and the

Dow hit record highs in a sharp rally on Wednesday after

Republican Donald Trump reclaimed the U.S. presidency, capping

his return four years after he was voted out of the White House.

As votes added up, so-called Trump trades rallied, U.S.

Treasury yields surged, bitcoin hit a record high and the

dollar gained.

Dow futures jumped more than 1,200 points, while those

tracking the benchmark index crept closer to the psychologically

significant 6,000 level.

"Markets absolutely crave certainty," said Dr. David Allen,

portfolio manager, Plato Global Alpha Fund, adding that a Trump

victory was likely "priced in at the margins".

Futures tracking the small cap Russell 2000 soared

6.2% to their highest levels since early 2022 as

domestic-focused stocks expect to benefit from an easier

regulatory and tax regime, as well as be less exposed to likely

import tariffs.

Stocks that were expected to perform well if Trump wins a

second term jumped. Trump Media & Technology Group ( DJT )

soared 30.7%, and prison operators Geo Group ( GEO ) and

CoreCivic ( CXW ) gained 30% and 22.4%, respectively.

Tesla shares leapt 15% as top shareholder and CEO

Elon Musk has supported Trump throughout his electoral campaign.

Strong gains were also seen in shares of banks,

cryptocurrency companies and energy firms, while renewable

energy shares fell.

The Republican party also gained control of the U.S. Senate,

and posted early gains in the battle to maintain control in the

House of Representatives.

A so-called "clean sweep", in which one party captures the

presidency, the House and the Senate would give Trump an easier

route to push through desired legislation.

"The big question for markets now is whether Trump's win

will bring full Republican control or a split government," said

Russell Shor, senior market specialist at trading platform

Tradu.

"If Republicans take both chambers, Trump could have more

room to cut corporate taxes-a potential boost for investor

confidence."

The VIX, a measure of market volatility, dropped

sharply to its lowest since September. Investors have been

bracing for several days of uncertainty over who the winner of

the presidency would be.

Dow E-minis were up 1,211 points, or 2.86%, U.S.

S&P 500 E-minis were up 132.5 points, or 2.28% and

Nasdaq 100 E-minis were up 359.75 points, or 1.77%.

Wall Street analysts expect Trump's plans for restricted

immigration, tax cuts and sweeping tariffs to put upward

pressure on inflation and bond yields, while corporations could

benefit from his tax and regulatory policies.

Later in the day, the Federal Reserve will kick off its

two-day meeting where the central bank is expected to ease

benchmark interest rate by 25 basis points.

However, bets on a December rate cut reduced slightly to 68%

from nearly 80% on Monday, as per CME FedWatch.