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Trump-linked stocks, Tesla jump

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Market volatility gauge falls sharply

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Russell 2000 futures soar

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Futures up: Dow 2.95%, S&P 500 2.09%, Nasdaq 1.45%

(Updated at 7:05 a.m. ET/1205 GMT)

By Lisa Pauline Mattackal and Medha Singh

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

Dow soared to record highs on Wednesday as Republican Donald

Trump won the 2024 U.S. presidential election, capping his

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

Wall Street is anticipating the potential for lower taxes,

deregulation and a U.S. president who is quick to sound off on

everything from the stock market to the dollar.

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

tracking the S&P 500 inched closer to the psychologically

significant 6,000 level.

Trump's victory powered a rally in so-called Trump trades,

while U.S. Treasury yields surged, bitcoin hit a record

high and the dollar gained.

"He (Trump) has a massive endorsement and will move much

faster than before. The market will price that in very quickly.

What's really important here is the markets like clarity, and

they have that," said Hendrik Du Toit, CEO of Ninety One.

Futures tracking the small cap Russell 2000 rose

5.4% 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 are expected to perform well under a second

Trump term jumped.

Trump Media & Technology Group ( DJT ) soared 37%, while

Tesla leapt 13.2% as top shareholder and CEO Elon Musk

has supported Trump throughout his electoral campaign.

Bank shares soared as yields rose and investors expected

them to benefit from less regulation. JPMorgan Chase ( JPM )

rose 6.7%, Bank of America ( BAC ) added 6.9%, while the SPDR

S&P Regional Banking ETF gained 8.9%.

Strong gains were also seen in shares of cryptocurrency

companies, energy firms and prison operators, while renewable

energy shares fell.

Focus turned to whether the Republican party could maintain

a majority in the House of Representatives after gaining control

of the U.S. Senate.

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 1,249 points, or 2.95%, S&P 500

E-minis were up 121.5 points, or 2.09% and Nasdaq 100

E-minis were up 295.5 points, or 1.45%.

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 start 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.