Global financial markets plummeted Tuesday night as early voting results showed Donald Trump unexpectedly ahead in the race for the White House.
On Wall Street, Dow Jones Industrial Average futures were down more than 400 points, or roughly 2 percent. The Standard & Poor’s 500-stock index sank 63 points, while the tech-heavy Nasdaq dropped more than 100 points.
The uncertainty over the outcome of one of the most contentious presidential elections in modern history rattled investors around the world. Japan’s Nikkei index plunged 382 points, or more than 2 percent, while Hong Kong’s Hang Seng index lost more than 600 points, or more than 2.5 percent. Meanwhile, the Mexican peso — which has fallen when the Republican nominee rose in the polls during his campaign — nosedived to an eight-year low, according to Bloomberg.
“Early results are showing a very tight race, tighter than the market expected,” said Trevor Charsley, senior markets adviser at financial services firm AFEX. “If Florida, or the other key states, declare for Trump we may see some real volatility ensue.”
In the United States, stock markets had surged over the past two days amid polling indicating Democratic nominee Hillary Clinton was likely to win the Oval Office. But as results began trickling in showing Trump with a lead in key swing states such as Florida and Ohio — and even ahead in Virginia, the home state of Clinton’s running mate, Tim Kaine — financial markets began to panic.
Trump has pledged to pull out of long-standing trade agreements if elected and slap double-digit tariffs on goods from Mexico and China. His message of isolationism has resonated with voters who feel left behind in an increasingly connected global economy, but many experts have warned his proposals could wreck havoc on the U.S. recovery — and potentially even throw the country into recession.
The “markets is seeing a risk-off reaction,” analysts at TD Rates said in a client note.