U.S. stock markets have been on an interesting ride since polls closed on Tuesday evening. As the tide of the election turned late that night, futures underwent an initial drop that was likely attributable to uncertainty—something markets don’t typically respond well to. That resulted in overselling, as investors got rid of their shares as they watched markets plummet.
But after the outcome of the election became clear, the markets stabilized, and on Wednesday, they rallied, a surge that carried over into Thursday morning, when it looked as if U.S. stocks were ready for another day of post-election increases. The Dow hit an all-time high, while the S&P rose 1 percent. But as of noon, markets eased after the morning jump, with the Dow up just 1 percent on the day and the Nasdaq dipping into negative territory.
Analysts, many of whom had predicted a market panic in the event of a Trump presidency, are still puzzling through why the market rallied on Wednesday. Indeed, post-election market rallies are generally rare: CNN reports that they’ve only occurred after six of the past 21 elections. One explanation is Trump’s pro-business stance, which brings expectations that he’ll roll back regulation and cut corporate taxes; another is that investors are bullish about the increased infrastructure spending that Trump promises. Whatever the cause, investors seem to be digesting Trump’s victory faster than expected.