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All three major indexes hit record highs

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Trump-linked stocks, Tesla jump

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Market volatility gauge falls sharply

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Indexes up: Dow 2.82%, S&P 500 1.62%, Nasdaq 1.69%

(Updated at 9:45 a.m. ET/1445 GMT)

By Lisa Pauline Mattackal and Ankika Biswas

Nov 6 (Reuters) - Wall Street's main indexes soared to

record highs on Wednesday, as Republican Donald Trump won the

2024 U.S. presidential election in a remarkable comeback four

years after he was voted out of the White House.

Wall Street is anticipating lower taxes, deregulation and a

U.S. president who is quick to sound off on everything from the

stock market to the dollar, even though tariff hikes could bring

challenges in the form of higher deficit and inflation.

The Republican's win powered a rally in Trump trades, as

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

and the dollar gained.

The Dow added more than 1,250 points, while the

benchmark index inched closer to the psychologically significant

6,000 level.

"There was relief that there was a quick and undisputed

election result," said David Morrison, senior market analyst,

Trade Nation.

The small-cap Russell 2000 jumped 4.1% to a nearly

three-year high, as domestic-focused stocks expect to benefit

from an easier regulatory and tax regime, as well as be less

exposed to likely import tariffs.

The VIX, a measure of market volatility, dropped

nearly 5 points to its lowest since September. Until the

results, investors were bracing for several days of uncertainty

over who the winner of the presidency would be.

"With the possibility of higher stimulus and reduced

restrictions or regulations on industries, we could end up

seeing the market post a strong rally between now and the end of

the year," said Sam Stovall, chief investment strategist at CFRA

Research.

Most of the S&P 500's sectors were trading higher.

Financials led the gains with a 5.1% surge to touch a

record high as yields rose and investors expected them to

benefit from less regulation.

The Energy, Industrials and Consumer

Discretionary sectors were all up more than 2%.

However, rate sensitive real estate and Utilities

slipped, pressured by higher yields.

Stocks that are expected to perform well under a second

Trump term posted strong gains, with Trump Media & Technology

Group ( DJT ) up 16%. Tesla leapt 13.4% as CEO Elon

Musk has supported Trump in his electoral campaign.

Strong gains were also seen in shares of cryptocurrency

companies, energy firms and prison operators, while renewable

energy shares fell.

The Dow Jones Industrial Average .DJI rose 1,190 points, or

2.82%, to 43412.81. The S&P 500 rose 93.73 points, or

1.62%, to 5,876.49​, while the Nasdaq Composite rose

312.049 points, or 1.69%, to 18,751.22.

Market 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 "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.

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.