(Updates prices)

*

Major stock indexes on Wall St hit record highs; Tesla

jumps

*

Dollar climbs, euro down 2%

*

Treasury yields surge as 30-year yield rises as much as 20

bps

*

Mexican peso hits two-year low

By Koh Gui Qing and Dhara Ranasinghe

NEW YORK/LONDON, Nov 6 (Reuters) - Wall Street marched

to record highs on Wednesday and major stock markets around the

world surged, while bitcoin hit an all-time-high and the dollar

was set for its biggest one-day jump in four years after Donald

Trump was elected U.S. president.

Trump's decisive victory pummelled long-dated Treasuries and

revived the "Trump trade," as yields sank in anticipation that

Trump will hike tariffs as he has promised, increasing the U.S.

deficit and inflation and causing the Federal Reserve to cut

interest rates by less than it otherwise would have.

Trump, 78, recaptured the White House in Tuesday's

election with resolute support, despite news reports and polls

that said it was a closely contested election.

"In the near term, we see U.S. equities supported by solid

economic and corporate earnings growth, political clarity and

Federal Reserve rate cuts," BlackRock Investment Institute said.

"Longer term, much depends on how much of Trump's agenda is

enacted."

The VIX, a measure of stocks' volatility also perceived as

"Wall Street's fear gauge," dived 21% as investors celebrated in

part the clarity of the election outcome and scooped up risky

assets across the board.

The S&P 500 Index jumped 2.4%, the Dow Jones

Industrial Average surged 3.4%, and the Nasdaq Composite leapt

2.7%. All three indexes hit record highs on Wednesday. The

MSCI index for world stocks rose 1.3%.

Shares in electric car maker Tesla leapt 13.6%

after Elon Musk, its billionaire chief executive officer,

emerged as one of Trump's key supporters in the final leg of his

2024 campaign.

Investors appeared to bet on

Tesla's benefiting from Musk's ties with Trump

, who has said he would a create a government efficiency

commission headed by Musk to cut federal spending.

Shares in Trump's social media company, Trump Media &

Technology Group ( DJT ), gained 3.6% to $35.10 after surging as

much as 42% overnight. The stock has halved in value since

hitting a record high in March.

The dollar index rallied 1.6% and was set for its

best day since March 2020.

Outside the United States, investors were decidedly less

euphoric, weighed by concerns that higher tariffs under Trump

would hurt global trade and economic growth.

European shares gave up earlier gains and fell 0.5%

. Mexico's peso sank to its weakest level in over two

years.

"The market is definitely moving in line with the Trump

playbook; stocks and small caps, in particular, are higher on

the idea that Trump will be good for U.S. companies," said Seema

Shah, chief global strategist for Principal Asset Management in

London.

"Across emerging markets, you can see China and Europe are

struggling with the idea that they could face higher tariffs,

and U.S. bond yields higher with expectations for a higher

fiscal deficit and inflation."

BONDS DISCONNECT

U.S. borrowing costs surged particularly for longer-dated

bonds, suggesting concern from investors about the U.S. deficit

path.

The 10-year Treasury yield rallied 16.2 basis

points to 4.4551%, its largest gain in a single day in nearly

seven months.

The 30-year Treasury yield rose 18.5 bps to

4.6339%, its biggest one-day increase since March 2020's

pandemic-induced volatility.

While markets were still confident the Federal

Reserve would cut interest rates by 25 basis points at the close

of its two-day meeting on Thursday, they slightly

reduced bets on further easing in December.

"The big challenge for markets is that if you do see tariffs

come through you need to balance the short-term nature of

inflation risks with the medium-term aspect of lower growth,"

said Justin Onuekwusi, chief investment officer at investment

firm St. James's Place. "The market appears to be thinking about

inflation right now."

In contrast, European government bonds rallied, and German

two-year bond yields fell 11 basis points to 2.19%,

while money markets priced in lower European Central Bank rates.

"For European businesses, Trump's return to the White House

would mean considerable trade policy and geopolitical

uncertainty, with negative implications for growth on the

continent," said Berenberg chief economist Holger Schmieding.

CURRENCY WINNERS AND LOSERS

Bitcoin emerged as one of the clear winners of the

day.

The cryptocurrency climbed to a record high of $75,459 and

was last up 9%. Trump is seen as more actively supportive of

cryptocurrencies than the Democratic candidate, Vice President

Kamala Harris.

In traditional currencies, the euro was hurt by potential

tariffs and the widening differential between U.S. and European

rates. It was last down 1.7% at $1.0740, set for its

biggest daily fall since 2016's Brexit referendum and outpacing

a 1.3% fall in sterling.

The dollar jumped 1.9% to 154.43 Japanese yen,,

and gained 1.4% on the offshore yuan to 7.1969 yuan amid

reports Chinese banks were selling dollars to slow the yuan's

decline.

China is seen on the front line of tariff risk, and its

currency in particular is trading on tenterhooks with implied

volatility against the dollar around record highs.

Chinese stock markets have surged to almost one-month highs

as investors expect a meeting of top policymakers in Beijing

this week to approve local government debt refinancing and

spending. Chinese blue chips lost early gains to turn

flat, and Hong Kong stocks fell over 2%.

Mexico's peso briefly dropped as low as 20.8038 per

dollar for the first time since August 2022, more than 3% below

its previous close - the biggest such tumble since Mexico's

election in the summer roiled domestic assets.

Ukraine's international sovereign bonds rallied nearly 2

cents, boosted by bets that a second Trump term could lead to a

quicker end to Russia's war in Ukraine.

The sharp rise in the dollar pressured oil prices, and other

commodities, as it makes them more expensive when buying in

other currencies.

U.S. crude edged up 0.2% to $72.14 per barrel, while

Brent fell 0.4% to $75.17.

Gold prices dropped 2.8% to $2,668.26 an ounce, off a

recent record peak of 2,790.15.