Stocks are soaring Wednesday after Donald Trump’s victory in the 2024 presidential election.

The Dow is up more than 1,500 points, marking the first time it has gained over a thousand points in a single day since November 2022. The Nasdaq jumped 3% to 18,983.47, and the S&P 500 rallied 2.5% to 5,929.04, according to the Associated Press..

Historically, the market rallies the day after Election Day. But Wednesday there were some clear winners, all indications of how investors believe Trump policies will affect the economy.

All three major indexes hit record highs, with Tesla stocks leading the pack. Ironically, Trump’s promised cuts to government subsidies for the electric vehicle industry will likely be a big blow to the sector as a whole, but investors are betting Tesla will hold an advantage.

Bank stocks also soared as investors believed Trump’s policies would strengthen the economy, leading to consumers getting more loans and paying more interest. However, bond yields are also up, indicating investors are betting on inflation ahead.

“With what would seem to be the certainty of the continuation of the Trump tax cut, we will be injecting the U.S. economy with more cash, which would be inflationary.,” said Mark Hamrick, Bankrate senior economic analyst.

He added: “Tarriffs, depending on how widely applied they are and at what level, would add to price concerns because you’re basically adding a tax to items that are imported into the United States, and we are entirely reliant on global supply chains.”

Deanna Dewberry, News10NBC: “What do i as an individual consumer need to do to prepare for financial changes that could be ahead?”

Mark Hamrick, Bankrate: “Saving for retirement. saving for emergencies. paying down debt. And if we do get into an environment where interest rates don’t go as low as we had previously thought, that means the cost of borrowing, such as with credit card debt, will either remain elevated, could potentially go higher or won’t go down as much as we had hoped.”

Therein lies more irony. What might be great for your 401(k) could hurt when you make a trip to the grocery store. The Federal Reserve has been increasing interest rates to slow down borrowing, stop the flow of money into the economy, and slow inflation. Pumping money into the economy flies in the face of those efforts.

So while it might seem counterintuitive, too much growth may not be a winner for your wallet while the nation is still trying to tame inflation.

In the short term, Hamrick says he believes the economy will stay the courts — healthy, good growth, low unemployment. But you should prepare for the possibility of inflation heating up again — and interest rates not falling as quickly as you may have hoped.

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