Wisdom Financial App noted that Trump's return to the White House has given a strong boost to the 'America First' trade on Wednesday, as the market bets that the next president will introduce policies that stimulate domestic growth and protect the world's largest economy from overseas competition.

A group of investors are pleased with the outlook of tax cuts benefiting businesses, while tariffs may drive the revival of domestic manufacturing and benefit American workers. An exchange-traded fund tracking the S&P 500 index rose 2.5%, while an ETF investing more broadly in developed country stocks fell by 1.4%. This divergence last occurred in 2016 when Trump first won the presidential election.

David Rosenberg, Founder and President of Rosenberg Research, described the risk appetite rising for American assets as 'a powerful trade'.

Two ETFs representing the theme of American manufacturing investments performed well. The First Trust RBA U.S. Industrial Renaissance ETF rose by 8%, while the Tema U.S. Reflation ETF increased by 6%. Both ETFs reached historic highs.

With Trump's disruptive protectionist agenda taking center stage, emerging market stocks fell, experiencing their largest drop in two years, lagging behind the U.S. stock market.

After Trump's return, expectations of accelerated economic growth and possible inflation increases drove U.S. Treasury yields soaring. Data shows that the five-year U.S. Treasury yield increased by 13 basis points, while the German five-year bund yield fell by 9 basis points, marking a rare divergence since Germany's reunification in the early 1990s.

However, overly extreme policies are not all favorable for the U.S. economy. For example, proposed tariffs are expected to harm GDP and corporate profits while increasing the government deficit. But for now, investors are willing to believe in the benefits that deregulation and tax cuts may bring. Small-cap stocks and regional bank indices surged by 6% and 13% respectively, as these companies are among the most affected by domestic growth.

The US dollar strengthened against major currencies, achieving its best single-day performance since September 2022. The strong US dollar prevented gold from hitting record highs, while putting pressure on oil and basic metals, which are usually seen as indicators of the global economy.

The era of US hegemony began after the 2008 financial crisis, when the Federal Reserve shifted to a rescue mode, helping to sustain long-term economic expansion. During Biden's presidency, economic prosperity continues, with US tech giants leading home trading during the pandemic lockdown and recent surge in artificial intelligence.

Strategists like Nikolaos Panigirtzoglou of JPMorgan Chase & Co. have stated that US-centric trade aligns with a relatively strong economy. They point out that after tariffs were imposed during Trump's first term, the US economy went through a period of rapid growth.

"In the long run, Trump's victory may strengthen the so-called American exceptionalism," the bank's strategist wrote in a report on Wednesday. "As US tariffs may impact other parts of the world earlier during Trump's second term, possibly as early as early next year, the current outstanding performance of the US economy may extend until 2025."

In conclusion, the post-election conclusion is clear: Anacapa Advisors Chief Investment Officer Phil Pecsok stated that the US-centric stock market's rise again shows investors' confidence in Trump.

"He uses tariffs as a bargaining chip, and it's very effective," he said. "Most companies prefer reduced regulation and lower taxes, so I think if he is elected president, the market will be more favorable."