Zhixun Finance App noted that Trump's victory in the presidential election has triggered a surge in the stock market, issuing a buy signal for rule-based investment funds, adding momentum to the market's rise.

On the eve of the election on Tuesday, Wall Street has been preparing for the potential turmoil that may occur after the election.

In contrast, Trump's clear victory led to the second largest single-day drop in the VIX index since 2021, while the S&P 500 index rose by 2.5%. These actions forced systematically biased funds to rebalance by investing in stocks, forming a technically driven feedback loop that increased other forces driving the market's rise.

Goldman Sachs tactical expert Scott Rubner wrote in a report to clients on Wednesday: 'The year-end rebound starts today and may be even higher than investors expect.' He listed buying behaviors tied to options contracts that periodically expire, such as 'election hedge removal, re-leveraging, buybacks, FOMO, Vanna.'

Nomura Securities International's analysis shows that volatility control funds are expected to purchase $50 billion of US stocks next month, with the total purchase amount reaching $110 billion by January. This Japanese bank also predicts that so-called risk-parity funds will significantly shift towards global equities. Rubner also believes that both types of investment tools are likely to make substantial purchases.

Risk management funds are typically driven by volatility signals rather than fundamental factors, and are extremely sensitive to changes in daily price fluctuations. When the market is volatile, they often suppress risk exposure, and when volatility decreases, they take the opposite approach.

Wednesday's rise marks this transition, as funds can increase risk after reducing stock exposure, as Wall Street prepares for the potential continued volatility if the election results remain uncertain.

Other technology factors also played a supportive role. Christopher Metli of Morgan Stanley wrote in a report to clients on Wednesday that funds using derivatives to enhance the returns of specific companies or indices are expected to generate about $15 billion in buy orders at the close of trading on Wednesday. With a large number of funds focusing on technology stocks, these funds are most likely to boost technology stocks, especially semiconductor companies.

In addition, according to Metli, Wall Street traders may purchase $5 billion worth of stocks on Wednesday to balance their options portfolio.

Chris Murphy, Co-Head of Derivatives Strategy at Susquehanna International Group, said: "Investors hedged before the election. These hedges will either gradually disappear or be sold for closing."